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UK Shoppers Face Higher Prices Due To Dough Merger

 |  November 6, 2022

An in-depth CMA investigation has provisionally found that Cérélia’s purchase of Jus-Rol could leave UK retailers and shoppers facing higher prices and lower quality products.

Ready-to-bake products – including staples such as shortcrust and puff pastry, pizza and patisserie dough – are found in all major grocery retailers, with UK consumers spending over £100 million each year on these products. Jus-Rol is by far the largest supplier of branded ready-to-bake products in the UK, while Cérélia is the largest supplier of own-brand ready-to-bake products, making these items on behalf of some of the nation’s largest grocery retailers.

The Competition and Markets Authority (CMA) launched an in-depth review into the deal in June 2022 after an initial Phase 1 investigation identified possible competition concerns. Over the past 5 months, an independent CMA panel has analysed a wide range of evidence from Cérélia and Jus-Rol, grocery retailers and other industry players in order to fully understand the market, as well as the potential impact of the deal.

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The CMA’s investigation has provisionally found that the merger brings together what are the 2 leading suppliers in the market by a considerable margin. Ready-to-bake items supplied by Cérélia and Jus-Rol account for nearly two-thirds of all such products sold in the UK.

While there are differences between the companies’ products, the evidence gathered by the CMA shows that Jus-Rol products compete with grocery retailers’ own-brand products supplied by Cérélia for the same space on many supermarket shelves. Evidence from grocery retailers shows that they consider the companies’ products to be important alternatives to one another – in particular because there are few alternative suppliers of either branded or own-brand products. Grocery retailers also told the CMA that their ability to trade off Jus-Rol and Cérélia when purchasing these products enables them to get a better deal for customers.