CMA concerns in chilled sauces

Greencore’s takeover of private-label food rival Bakkavor has raised competition concerns by the UK watchdog in chilled sauces but not for ready meals and salads.

As part of its so-called Phase-one investigation, the Competition and Markets Authority (CMA) said today (27 October) that the merger could lead to a “substantial lessening of competition” in own-label chilled sauces.

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However, the CMA has found the deal, first revealed in March between Ireland-headquartered Greencore and UK-based Bakkavor, does not raise similar concerns from “horizontal unilateral effects” in private-label Italian chilled ready meals or in own-label salads.

The regulator added it has given the two parties until 3 November to offer remedies that will allay those competition concerns in chilled sauces.

A pair of companies – 2 Sisters Food Group and Billington Foods – were identified by the CMA as “material” competitors in sauces within the UK market, although both were deemed as “weaker” by the regulator.

In Italian ready meals, the CMA explained the merger would be “constrained” by other “established suppliers” such as Oscar Mayer and Samworth Brothers, along with 2 Sisters and Pilgrim’s Pride, which are generally focused on meal ranges like Asian foods.

A failure by Greencore and Bakkavor to provide remedies in chilled sauces could lead to a more in-depth Phase-two investigation by the CMA.

For private-label salads, the regulator said the merger would also be constrained by Samworth Brothers, Avondale Foods and Natures Way Foods.

In response, Greencore and Bakkavor said in a joint statement that they will both work “constructively” with the CMA to resolve the issue raised in chilled sauces as they seek to finalise the merger in “early” 2026.

Dalton Philips, CEO of Greencore, said: “The CMA process has been constructive and the Phase-one decision is a welcome one, confirming our view of the highly complementary nature of our businesses and product portfolios across “food for now” and “food for later”.

The statement added that the “CMA agreed with Greencore and Bakkavor that the transaction does not raise any competition concerns in relation to approximately 99% of the revenues of the combined group”.

The deal, which would create a private-label business with an estimated £4bn ($5.3bn) in revenue, has already received strong support from Bakkavor shareholders, with 99.98% voting in favour.

Greencore’s directors have also approved the transaction.

Mike Edwards, CEO of Bakkavor, added in today’s statement: “Today’s positive news from the CMA is a significant step forward in the process, providing welcome clarity, which means we can collectively work at pace and stay on track to complete the transaction in early 2026.”

Greencore, headquartered in Dublin, secured agreement in principle from Bakkavor’s board in April after two previous bids were rejected, with the cash and stock deal being formalised in May.

One potential challenge for the merger is the prospect of job losses.

Greencore has estimated that up to 5% of the combined workforce, potentially affecting 1,525 employees, could face redundancies due to office and factory consolidations.

Bakkavor would add pizza, breads, desserts, and chilled dips to Greencore’s portfolio, complementing its existing range of products including sushi, chilled snacks, quiche, soups, sauces, pickles, and Yorkshire puddings.

Both companies compete with branded manufacturers in the ready-meals category. Other overlapping segments include sandwiches and prepared salads, which are supplied to supermarkets under own-label food-to-go offerings.

Bakkavor also produces bagged salads for the major supermarket chains.