CMA consulting on further changes to assuage competition concerns

CMA consulting on further changes to assuage competition concerns

Dairy Crest has said the sale of its dairies division to Muller remains "on track" for completion this year after the UK's Competition and Markets Authority said it is consulting on further adjustments to the proposed deal.

When the sale was first announced, the CMA flagged a number of competition concerns it believed would arise from the deal, which would effectively leave two major, nationwide milk suppliers in the UK - Muller and Arla Foods. To address these concerns – and avoid a more detailed investigation – Muller said in August it would undertake to "toll process" on a nominated volume of fresh liquid milk.

Following an initial consultation on the proposal, further changes have been made, the CMA announced yesterday (30 September). These include a price mechanism for the toll process that will be adjusted annually to reflect input costs; a fund to support the toll purchaser engage with independent consultants; the actual price of packaged cream to be based on actual fixed costs; and annual audits – paid for by Muller – to ensure the German dairy group is in compliance with the toll agreement.

Following the announcement, Dairy Crest issued a statement insisting that it still expects to close the deal before the end of the year.

The company said: "The CMA has today announced that it proposes to accept modified undertakings provided by Müller subject to comments from third parties on those modifications. The deadline of 19th October for the final decision remains unchanged and Dairy Crest continues to anticipate that the sale will complete before the end of 2015."