The firm currently owns the Matthew Walker Christmas pudding business, which the OFT is concerned will lead to significant price rises for consumers over the festive season. This was acquired as part of the Northern Foods £341M acquisition in January last year.
2 Sisters also acquired the Avana business as part of the £30M Brookes Avana deal with Premier Foods in December last year.
A spokesman for 2 Sisters told FoodManufacture.co.uk: “Disappointingly, the OFT has rejected our proposed Undertakings in Lieu (UIL) in relation to the Avana Christmas puddings business.
Consider our options
“This is a small part of the overall Brookes Avana business. We believe that the OFT has failed to understand the very competitive dynamics of the own-label market. We will now consider our options to deal with the OFT’s findings in respect of Avana Christmas puddings.”
The firm argued that the Christmas pudding market was mainly driven by the retailers requiring different products from their suppliers, which would not affect the price paid by consumers.
Matthew Walker currently supplies the large multiples, Harrods and produces the Heston Blumenthal Christmas pudding.
The Avana business is a much smaller operation that manufactures own-label Christmas puddings, according to 2 Sisters.
The accusation comes after the OFT revealed that the firm, owned by food magnate Ranjit Boparan, had agreed to offload one of the businesses in a bid to push through the Brookes Avana deal.
Two main suppliers
On Monday (March 19), Amelia Fletcher, OFT chief economist, said: “This merger brings together the two main suppliers of Christmas puddings to the major grocery retailers in the UK and although these puddings might only be purchased once a year, total sales are over £40M a year.
“We are concerned that this loss of competition could ultimately lead to price rises for consumers at a time of year which is already very costly for families. The OFT is now considering the remedy offered by the parties to remove these competition concerns.”
Despite the OFT approving the sale of the Avana business, which accounts for just 4% of the deal with Premier, it also cleared 96% of the acquisition. This includes the main Rogerstone Park chilled ready meals facility, the Avana chilled cakes, puddings and desserts facility and the Leicester chilled pies and pizza facility.