The UK's Competition and Markets Authority has raised concerns that Unilever's proposed £33.8 billion merger with US food company McCormick could reduce competition in the market for dry ingredient and sauce mixes. The CMA, which began investigating the deal announced in March, found that combining the two businesses would create by far the largest supplier of products such as dry ingredient mixes for meals like chilli con carne and dry sauce mixes including parsley sauce.
Unilever owns food brands including Knorr, Maille and Colman's, while McCormick holds Schwartz and French's in the UK. The CMA identified other competitors in the market such as Maggi seasoning mix and Bisto dry sauce, but concluded these products "impose only a limited constraint" on what the merged group would offer. The regulator also examined potential competition concerns over mustard supply to UK supermarkets, where Unilever owns Colman's and Maille while McCormick owns French's. However, the CMA found that because consumers view English, French and American style mustards as distinct categories, supermarkets tend to stock each type separately, meaning there is limited overlap between the two companies' mustard products and "no realistic prospect" of competition problems in that area.
The CMA has given Unilever and McCormick until the following Wednesday to propose solutions addressing its concerns about reduced competition in dry ingredient and sauce mixes. If the regulator remains unsatisfied, the investigation will advance to the next stage. A Unilever spokesperson said the company had already decided in August to put the Colman's brand up for sale to address potential competition concerns, and said talks with potential buyers were progressing. The company added it was making "good progress on regulatory approvals globally" and remained confident in closing the deal in a timely manner.
For UK consumers and businesses, the CMA's concerns mean that if the merger proceeds unchanged, they could face fewer choices and potentially less competitive pricing in dry ingredient and sauce mixes sold in supermarkets.