Heinz acquisition of HP Foods referred to competition body

LONDON - The Office of Fair Trading has referred Heinz's 拢470m acquisition of HP Foods to the Competition Commission after concerns that the combined firm will dominate the condiments market.

In a statement, the OFT said that the "test for reference" was met because of the presence in the market that Heinz will gain when it adds the UK's biggest selling brand of brown sauce and HP Baked Beans to its own range of Heinz Ketchup and Beanz.

Vincent Smith, director of competition enforcement at the OFT, said: "This transaction brings together two of the largest branded sauce suppliers in the UK, who compete in a number of product categories.

"As a result of the merger, retail customers and consumers could suffer from less competition resulting in higher prices for products such as HP brown sauce, tomato ketchup and baked beans."

The 拢470m acquisition of HP Foods by HJ Heinz was announced in June. At the time, Heinz said it would not be running any television or consumer print advertising while the company undertook a complete strategic review after the completion of the HP acquisition.

Jane Miller, president of Heinz UK & Ireland, said: "Heinz will cooperate fully with the Competition Commission as it reviews the merits of our acquisition of HP Foods.

"It is not unusual for acquisitions of this magnitude to be referred to the Competition Commission to ensure that any potential concerns are addressed. Heinz is confident that this acquisition will meet the criteria for final clearance. This deal has already received approval from the merger authorities in Ireland and Germany."

When it acquired HP Foods, Heinz said that the move was in line with its plan to focus more on its profitable sauces and condiments lines.

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