Food and Beverage Business

UK watchdog warns that T&L Sugars and Tereos deal may lead to price hikes for consumers

UK watchdog warns that T&L Sugars and Tereos deal may lead to price hikes for consumers confectionery, Shelf-stable Food and Beverage Business

The sale of Tereos’ UK sugar business to T&L Sugars may lead to increased sugar prices for consumers in the country, according to the Competition and Markets Authority (CMA). In its initial investigation, the CMA found that the deal could result in “a substantial lessening of competition” as the two companies only face competition from one other sugar major, British Sugar. If the merger goes ahead, the sugar market will become more concentrated, potentially resulting in retailers having to pay higher prices for sugar, ultimately affecting consumers.

Sorcha O’Carroll, senior director of mergers at the CMA, stated, “This deal would bring together two of the three players in the UK sugar sector, reducing competition and choice further for people and businesses.” Both T&L Sugars and Tereos have five working days to address the CMA’s concerns, failing which the investigation will move into its second phase.

“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,” O’Carroll added. At the time of writing, neither company had responded to requests for comment from Just Food.

The CMA initiated its probe into the deal earlier this year after Tereos sold its site in Normanton to T&L Sugars in November 2023. Financial details of the transaction were not disclosed. Tereos expressed its satisfaction with TLS acquiring the UK site and ensuring the future for all employees, factory, and storage facilities. The group confirmed that its UK and Ireland operations would continue under the TUKI name post-transaction.

The Tereos UK and Ireland branch, TUKI, distributes sugar products under the Whitworths brand, while T&L Sugars produces sugar and sweetener products under the Tate and Lyle brand. Both companies market their products to supermarkets, grocery wholesalers, and foodservice providers across the UK.

In conclusion, the proposed acquisition of Tereos’ UK sugar business by T&L Sugars has raised concerns about market competition and potential price increases for consumers. Both companies have a limited time to address these concerns before further investigation ensues. The outcome of this deal could have a significant impact on the sugar industry in the UK.

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