CMA flags supermarket sauce competition concerns in Greencore-Bakkavor merger

The UK’s Competition and Markets Authority (CMA) has warned that Greencore Group’s proposed £1.2 billion acquisition of Bakkavor Group could result in a “substantial lessening of competition” in the supply of own-label chilled sauces to supermarkets.

Following completion of its Phase One investigation, the regulator has given initial approval to the proposed deal, finding no competition concerns regarding the vast majority of the companies’ operations. It did, however, identify a potential issue in the supply of own-label chilled sauces arising from “horizontal unilateral effects.”

The companies now have until November 3 to offer undertakings to address the regulator’s concerns. If suitable remedies are not proposed, the CMA could refer the case for an in-depth Phase Two investigation.

Greencore chief executive Dalton Philips said: “The CMA process has been constructive and the Phase 1 decision is a welcome one, confirming our view of the highly complementary nature of our businesses and product portfolios across ‘food for now’ and ‘food for later’. I am really grateful to my colleagues at Greencore and Bakkavor in successfully getting us to this point and we are now working with the CMA and Bakkavor for the benefit of all our stakeholders to complete the Bakkavor transaction early next year.”

Bakkavor chief executive Mike Edwards added: “Today’s positive news from the CMA is a significant step forward in the process, providing welcome clarity which means we can collectively work at pace and stay on track to complete the transaction in early 2026.”

He added: “Bakkavor is in great shape and we remain excited about joining the Greencore business and unlocking all the associated benefits we have highlighted for colleagues, customers and shareholders.”

Announced earlier this year, the deal would unite two of the UK’s largest chilled food manufacturers, whose combined businesses span sandwiches, salads, ready meals and dips.