In March, the CMA warned that the acquisition could significantly harm competition in the U.K. sugar market, potentially leading to higher prices for consumers. The two companies together hold a market share of more than 25% by volume in various segments of the U.K. sugar sector, prompting a closer look under the CMA’s supply test.
However, by August, the CMA provisionally cleared Tate & Lyle’s acquisition, acknowledging that the potential failure of Tereos’ U.K. unit would also result in a loss of competition.
Financial Challenges and Market Impact
Tereos had informed the CMA that its U.K. unit had never been profitable and that it could sell its surplus sugar more profitably in other markets once French demand was met. While the CMA did not disclose Tereos’ financial performance publicly, its analysis confirmed that the company’s U.K. operations had been consistently loss-making over an extended period.
The Tate & Lyle sugar business deal marks a significant shift in the U.K. sugar industry landscape, with the potential to reshape competition dynamics. Despite initial concerns, the CMA’s decision suggests that the benefits of keeping the Tereos unit operational outweigh the risks of reduced competition.
