The Competition and Markets Authority (CMA) on Friday said T&L Sugars Limited’s purchase of Tereos UK & Ireland’s ‘business to consumer’ packed sugar business (TUKI B2C) from Tereos SCA could result in higher sugar prices for UK shoppers.
Following an initial Phase 1 investigation, the regulator has found that the deal could lead to a ‘substantial lessening of competition’. TLS and Tereos now have five working days to offer solutions which fully resolve the CMA’s competition concerns, otherwise it will refer the deal to an in-depth Phase 2 investigation.
TLS is a sugar producer which refines and distributes sugar and related products, including under the Tate and Lyle brand, to supermarkets and other businesses such as grocery wholesalers, hotels, and cafes in the UK.
TUKI B2C sources sugar from its Europe-based parent company, Tereos, and uses a facility in Normanton, West Yorkshire as a packing and distribution site to sell packed sugar in the UK, including under the Whitworths brand.
The CMA sais these two companies only face competition from one other company, British Sugar, in the supply of packed sugar to a range of businesses, including supermarkets. The loss of competition from the deal could lead to supermarkets paying more for packed sugar and shoppers could see higher prices for packs of sugar on shelves as a result, the regulator noted
“The supply of sugar to grocery retailers in the UK is already highly concentrated. This deal would bring together two of the three players in the UK sugar sector, reducing competition and choice further for people and businesses,” Sorcha O’Carroll, senior director of mergers at the CMA, said.
“It’s now up to TLS and Tereos to find a way to address our competition concerns to avoid the deal being referred to an in-depth Phase 2 investigation.”
T&L Sugars Limited announced the deal to buy the UK packing and distribution site and ‘business-to-consumer’ activities from Tereos UK & Ireland in November 2023.
