France’s competition watchdog is to open an “in-depth” investigation into plans for a new venture between food manufacturers Euralis and Maïsadour.

Last year, the co-operatives set out plans to combine their operations in foie gras, salmon and direct sales. At the time, the companies said the move would make the assets more competitive and allow for further investment in brands.

As part of the plans, the operations were to be placed “under a common structure, in which the two cooperatives would be equal and, together, majority shareholders”, a joint statement read.

France’s Autorité de la Concurrence took an initial look at the proposed deal earlier this year. After that review, the watchdog argued the transaction would give the joint venture “significant market shares” in the collection of animals for slaughter and in downstream markets for the “production and marketing of fattened duck products”. There would therefore be a risk of higher prices and lower product quality, the anti-trust body asserted.

Euralis and Maïsadour put forward possible “remedies” – so far unspecified – but these proposals were not enough to prevent the launch of a deeper investigation.

“During this in-depth examination, the Autorité will, in particular, consult market stakeholders through hearings or new market tests and will examine the arguments raised by the notifying parties,” the watchdog said.

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By GlobalData

“The opening of a phase two [examination] does not prejudge the existence of possible harm to competition or the outcome of the merger clearance application.”

Just Food has approached Euralis and Maïsadour for comment.

Euralis has three factories in the sector, one each in Maubourguet, Sarlat and Les Herbiers. Its brands include Maison Montfort et Rougié. Euralis’s business also takes in areas including vegetable production and animal nutrition.

Maïsadour markets food brands including Delpeyrat salmon, Marie Hot chicken and Comtesse du Barry foie gras.