Competition commission rules on egg merger

The Competition Commission (CC) has confirmed that Noble Foods must sell Clifford Kent Holdings, the parent company of Stonegate Farmers, to maintain competition in the UK shell egg sector.

Noble had been formed by the merger of Stonegate and Deans Food Group, but following its inquiry, the CC has formally concluded that the merger would reduce competition in markets for fresh eggs, leading to higher prices for retailers.

In its final report published today (20 April), the CC states that the merger, which brings together the two largest suppliers of shell eggs and processed eggs in the UK, is likely to lead to a substantial lessening of competition (SLC) in the market for the supply of shell eggs to retailers, and for the procurement of eggs from producers.

After considering potential remedies, the CC has decided that the sale of Stonegate would be the best way to address the “Significant Lessening of Competition” and the adverse effects likely to arise from the merger.

The merger had been completed by the time of its reference to the CC and so the remedy will mean the recreation of two substantial competing egg suppliers. Noble will be required to sell Stonegate to form a viable competitor