Dairy merger faces in-depth investigation

Müller’s proposed acquisition of Dairy Crest’s dairy operations will be referred for an in-depth investigation, the Competition and Markets Authority (CMA) has announced, unless acceptable undertakings are offered.

Müller UK & Ireland Group LLP and Dairy Crest Group are two of the three main dairy processors in the UK. Together they process around 3.5 billion litres of milk per year and account for nearly half of the fresh milk consumed in the UK. And the CMA has found that the proposed acquisition could impact competition in the supply of fresh milk to major grocery retailers.

In reaching its decision, the regulator says it took into account the significant financial challenges facing the dairy sector in the UK.

Sheldon Mills, CMA senior director of mergers and decision-maker in this case, said: “Unless the businesses offer undertakings that resolve the competition concerns, this transaction will face an in-depth investigation to ensure that the merger of two of the largest UK dairy companies will not result in higher prices for national grocery retailers and, ultimately, for consumers, for whom milk is an important everyday purchase.