The UK’s competitions watchdog has determined that the merger of two pastry manufacturers could lead to higher prices for consumers.
It comes after ready-to-bake pastry maker Cerelia struck a deal with rival home baking brand Jus-Rol in 2021.
However the Competition and Markets Authority (CMA) said it could cut competition and see supermarkets paying more for potentially lower quality products.
The CMA has given both two companies until November 25 to give their response to the provisional findings.
It said it launched an investigation as the businesses account for nearly two-thirds of the entire UK home baking market, which could mean competitors could have problems trying to compete.
Margot Daly, who chairs the group carrying out the investigation, said: “Food prices are already increasing, which makes it important that we don’t allow a lack of competition to make the situation worse.
“Jus-Rol and Cerelia are by far the largest suppliers in the ready-to-bake sector and the competition that takes place between them helps grocers to give shoppers the best possible deals.
“Today’s decision is provisional, and we will now consult on our findings and listen to any further views before reaching a final decision.”
Management at BakeAway, which is owned by Cerelia and based in Corby in Northamptonshire, said the CMA failed to understand how competition works in the grocery market.
BakeAway’s managing director Jan Boers said: “We are deeply disappointed with today’s announcement which, if confirmed in a final decision, would negatively impact the UK grocery sector, affecting its value, blocking much needed investment into growth, and depriving shoppers of the benefits of important investment and innovation in the home baking segment.
“BakeAway competes in the market alongside large and highly efficient European contract manufacturers, as well as several strong UK suppliers.
“The CMA’s provisional decision underestimates the strength of these competitors.”
The manufacturer said it hopes to “reinvigorate” the iconic Jus-Rol brand and that the acquisition has already created jobs in Corby.
It added that it would keep working with the watchdog to find a constructive solution.
