Marketing authority to investigate pork pie merger

The Competition and Marketing Authority (CMA) is to investigate the merger of Pork Farms and Kerry Foods over concern it could form a monopoly in the pork pie market.

The acquisition of Kerry Foods chilled savoury pastry business by Pork Farms in August has raised fears of lessening competition and higher prices and a reduction in choice or quality for consumers.

“The CMA has found that there is a realistic prospect that the merger will result in a substantial lessening of competition in the branded, own label and convenience retail segments of the supply of cold pies, and the supply of sausage rolls, pasties and slices (when considered in combination) or the supply of sausage rolls (when considered individually),” the CMA said in a statement on it’s website.

Both companies manufacture and supply branded and own label chilled savoury pork products to the food retail sector.

The merger has resulted in the largest or second largest manufacturer of the products to grocery retailers and to convenience stores, either as own label or branded goods.

Andrea Coscelli, Executive Director, Markets and Mergers and decision maker in this case said: “These are very popular products which are currently produced by a small number of manufacturers. This merger will further reduce the choice available to retailers and consumers and may give the merged company the ability to raise prices or reduce the quality of these products.

“Unless Pork Farms offers undertakings that resolve these concerns, we think it is necessary to investigate the merger in greater detail to see whether it could harm consumers’ interests.”

However, Pork Farms said it was disappointed with CMA's decision.

 “A key rationale behind the creation of the new group is its enhanced ability to provide increased investment behind the markets we operate in to provide greater choice, quality and value to our customers and consumers as well as new opportunities for our employees.

 “We continue to believe that the transaction will provide our customers with a streamlined, more responsive and better invested supply chain, reflecting the increasingly competitive retail landscape that we are seeing in today’s markets as consumers’ shopping habits change. Quality, choice, service and value have always been at the core of our business and this remains the case.

 “We will continue to work closely with the CMA in relation to the transaction to ensure that it has all necessary information to inform the review process,” a spokesman for company said.

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