Tate & Lyle and Whitworth deal could be blocked over sugar price rise concerns

08 March 2024 , 10:59

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The Competition and Markets Authority is concerned that a deal between Tate & Lyle and Whitworths could push up the price of sugar (Image: PA Archive/PA Images)

The competition watchdog has warned that it might stop a deal between the two companies that make the Tate & Lyle and Whitworths brand of sugars over fears the tie-up could push prices higher.

Tate & Lyle Sugars (TLS) the company behind Tate & Lyle announced its plan to buy Tereos UK and Ireland's business-to-consumer packed sugar unit in November. The Competition and Markets Authority (CMA) said this deal could "lead to a substantial lessening of competition," and has given the two firms five working days to offer solutions or face a more detailed investigation.

TLS refines and distributes sugar and similar products to supermarkets, wholesalers, hotels and cafes in the UK. The part of Tereos it plans to buy packages and distributes sugar from its factory in Normanton, West Yorkshire, to UK buyers. One of its brands is Whitworths.

There is only one other competitor which supplies packed sugar to many businesses, including supermarkets, the CMA said. That competitor is British Sugar, a sister company of Primark. If the deal goes ahead, supermarkets could end up paying more for sugar, which could increase prices on the shelves for customers, the CMA warned.

"The supply of sugar to grocery retailers in the UK is already highly concentrated. This deal would bring together two of the three players in the UK sugar sector, reducing competition and choice further for people and businesses," pointed out Sorcha O'Carroll from the CMA.

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"It's now up to TLS and Tereos to find a way to address our competition concerns to avoid the deal being referred to an in-depth phase 2 investigation."

Lawrence Matheson