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OFT refers completed acquisition by Napier Brown of James Budgett Sugars

167/04    12 October 2004

The OFT today referred the completed acquisition by Napier Brown Foods plc of James Budgett Sugars Ltd to the Competition Commission (CC).

The OFT believes that a relevant merger situation has been created, and that it may be the case that the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within the market for the supply of sugar to industrial users in the UK.

The merger results in a reduction from four to three of the major suppliers of sugar to industrial users in the UK.  The OFT's investigation indicates that the competitive constraints on these major suppliers are weak.

Vincent Smith, Director of Competition Enforcement, said:

'This is a merger between two of the four UK suppliers of sugar to industrial customers.  Although it is possible that the merger could lead to a 'third force' in the supply of sugar to UK industrial users, the OFT has not been provided with sufficent consistent information to counter the competition concerns identified. Further investigation by the CC is needed.'

The CC is expected to report by 28 March 2005.

NOTES

1 The Enterprise Act 2002 empowers the Office of Fair Trading to refer to the CC completed or anticipated mergers for investigation and report which create or enhance a 25 per cent share of supply in the UK (or a substantial part thereof) or where the turnover in the UK associated with the enterprise being acquired is over £70m.

2 The CC may extend the 24 week period within which it is required to publish its report by no more than eight weeks if it considers that there are special reasons why the report cannot be published within that period.

3 The text of this decision will be placed on the mergers section of this website as soon as is reasonably practicable.

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