The Competition and Markets Authority (CMA) has raised concerns over Premier Foods' recent sale of its Twinings tea brand, warning that the deal could reduce competition in the UK's hot beverages sector.
The watchdog has launched an in-depth investigation into the transaction, which saw Premier Foods offload the iconic tea brand to an undisclosed buyer. The CMA fears the move may lead to higher prices or lower quality for consumers.
Market Dominance Fears
In its preliminary findings, the regulator highlighted potential anti-competitive effects in the £1.2 billion UK tea market. "We're concerned this deal could leave shoppers with fewer choices and potentially higher prices," a CMA spokesperson said.
Premier Foods, which also owns Mr Kipling and Bisto, acquired Twinings as part of its 2020 takeover of Associated British Foods' grocery division. The company has defended the sale, stating it remains "confident the transaction poses no threat to competition."
What Happens Next?
The CMA has given both parties five working days to propose solutions to address competition concerns. If satisfactory remedies aren't offered, the case will proceed to a Phase 2 investigation, which could take up to six months.
Industry analysts suggest the watchdog may require the buyer to divest certain assets or brands to maintain market balance. The outcome could significantly impact the competitive landscape of Britain's hot drinks industry.
