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CC Requires Stonegate Sell Off

by 5m Editor
20 April 2007, at 11:47am

UK - The Competition Commission (CC) has confirmed that Noble Foods Limited (Noble) must sell Clifford Kent Holdings Ltd, parent company of Stonegate Farmers Limited (Stonegate), to maintain competition in shell eggs (fresh eggs) in the UK.

Noble had been formed by the merger of Stonegate and Deans Food Group Limited (Deans), but following its inquiry, the CC has formally concluded that the merger would reduce competition in markets for fresh eggs, leading to higher prices for retailers.

In its final report published today the CC states that the merger, which brings together the two largest suppliers of shell eggs and processed eggs in the UK, is likely to lead to a substantial lessening of competition (SLC) in the market for the supply of shell eggs—cage (intensive), free range and organic—to retailers, and for the procurement of eggs from producers. As a result, the CC stated, the merger is likely to lead to higher prices of eggs for customers.

This confirms the inquiry’s provisional findings on shell eggs, which were published in January. See News release dated 5 January.

After considering potential remedies, the CC has decided that the sale of Stonegate would be the best way to address the SLC and the adverse effects likely to arise from the merger. The merger had been completed by the time of its reference to the CC and so the remedy will mean the recreation of two substantial competing egg suppliers. Noble will be required to sell Stonegate to form a viable competitor.

Further Reading

Noble means no choice, says BFREPA
Why Deans/Stonegate merger enquiry was ordered
UK's largest egg packers to merge
CC Says Egg Merger Reduces Competition

5m Editor