The UK's Competition and Markets Authority (CMA) has found that the £33.8 billion merger of Unilever's food business with US rival McCormick could lead to less competition in the market for dry ingredient and sauce mixes.
The tie-up, announced in March, would create the biggest supplier of dry ingredient mixes—for meals such as chilli con carne—and dry sauce mixes such as parsley sauce in the UK market "by far", according to the regulator.
Brands and Market Position
Unilever, the UK-based consumer goods giant, includes brands like Knorr, Maille and Colman's in its food division, while McCormick owns Schwartz and French's in the UK.
The CMA identified competitors such as seasoning mix brand Maggi and dry sauce brand Bisto, but said these products "impose only a limited constraint" on the merged food group.
Mustard Supply Concerns
The regulator also examined potential competition concerns over the supply of mustard to UK supermarkets, with Unilever owning Colman's and Maille, while McCormick owns French's.
However, the CMA found that consumers typically consider English, French and American style mustards as distinct from one another, so supermarkets tend to stock each different type. This means there is limited overlap between the two companies' mustard products and therefore "no realistic prospect" of competition concerns over the condiment.
Next Steps for the Merger
The CMA said Unilever and McCormick have until next Wednesday to offer solutions that might address its concerns about the lessening of competition for some food products in shops. If the regulator is not satisfied, it will take its investigation to the next stage.
