French Competition Watchdog Probes Merger Of Food Co-Ops

France’s competition watchdog is to open an “in-depth” investigation into plans for a new venture between food manufacturers Euralis and Maïsadour.

Last year, the co-operatives set out plans to combine their operations in foie gras, salmon and direct sales. At the time, the companies said the move would make the assets more competitive and allow for further investment in brands.

As part of the plans, the operations were to be placed “under a common structure, in which the two cooperatives would be equal and, together, majority shareholders”, a joint statement read.

Related: The Competitive Assessment of Mergers in Retail Grocery Markets: A Basket Case?

France’s Autorité de la Concurrence took an initial look at the proposed deal earlier this year. After that review, the watchdog argued the transaction would give the joint venture “significant market shares” in the collection of animals for slaughter and in downstream markets for the “production and marketing of fattened duck products”. There would therefore be a risk of higher prices and lower product quality, the anti-trust body asserted.

Euralis and Maïsadour put forward possible “remedies” – so far unspecified – but these proposals were not enough to prevent the launch of a deeper investigation.

“During this in-depth examination, the Autorité will, in particular, consult market stakeholders through hearings or new market tests and will examine the arguments raised by the notifying parties,” the watchdog said.