Pudding fight leaves Boparan with sticky problem

THE attempted takeover of a Christmas pudding business could lead to Northern Foods owner Boparan Holdings facing an Office of Far Trading (OFT) enquiry.

Boparan is bidding to grow its food empire by taking on chilled food brand R F Brookes and Avana Bakeries from Premier Foods Ltd in a £30m deal.

However, the company has run into problems because it already owns the Matthew Walker brand, which it acquired last year when it took over Northern Foods.

Should the acquisition of Avana go ahead it would leave Northern with a major slice of the £40m Christmas pudding market.

The deal has attracted concerns from the OFT, which is worried about a possible pudding cartel forcing up the price of the festive favourite.

Northern and Premier supply own-label foods to the UK’s major supermarkets and grocery retailers.

The OFT said that while its investigation found no competition concerns in relation to chilled ready meals, chilled pizzas and chilled savoury pastries, it concluded that the acquisition would give rise to concerns about the supply of Christmas puddings.

It said the merger would bring together the two largest suppliers of Christmas puddings who together account for the vast majority of UK supply. It added a number of the parties’ customers had raised significant concerns that, due to the distinctive seasonal demand for Christmas puddings, the merger might result in price increases.

To sweeten the deal and end the OFT’s concerns, Boparan has offered to sell its Matthew Walker brand, which is acquired when it took over Northern Foods last year.

Amelia Fletcher, OFT Chief Economist and the decision maker in the case, said: “This merger brings together the two main suppliers of Christmas puddings to the major grocery retailers in the UK and although these puddings might only be purchased once a year, total sales are over £40m a year.

“We are concerned this loss of competition could ultimately lead to price rises for consumers at a time of year which is already very costly for families. The OFT is now considering the remedy offered by the parties to remove these competition concerns.”

The OFT said while the proposals were being considered, its duty to refer the merger to the Competition Commission had been suspended.