The UK's competition regulator has thrown a major spanner in the works of a proposed £1.7 billion merger between two of Britain's biggest food manufacturers, Greencore and Bakkavor.
The Competition and Markets Authority (CMA) announced it is launching an in-depth phase 2 investigation into the deal, warning that the combination could substantially reduce competition in several key food categories.
Serious Competition Concerns Raised
In its initial findings, the CMA expressed significant worries that the merged entity would dominate certain markets, potentially leading to higher prices and reduced choice for supermarkets, food service companies, and ultimately consumers.
The watchdog highlighted particular concerns in the chilled prepared foods sector, where both companies are major players in supplying sandwiches, salads, and ready meals to UK supermarkets.
What the Merger Would Create
If approved, the deal would create a food manufacturing powerhouse with:
- Combined revenues exceeding £3 billion
- Over 50 manufacturing sites across the UK and Ireland
- Approximately 25,000 employees
- Dominant positions in multiple food categories
Industry Reaction and Next Steps
The decision comes after the CMA completed its phase 1 review, concluding that the merger raises sufficient competition concerns to warrant a more detailed investigation.
Both companies now face several months of scrutiny as an independent panel examines the potential impact on various markets. The CMA has until March 2026 to deliver its final verdict, which could include requiring the companies to sell off parts of their business or potentially blocking the deal entirely.
This development represents a significant setback for Greencore and Bakkavor, who had argued that the merger would create efficiencies and help them compete more effectively in the challenging food manufacturing landscape.
