UK CMA tells Unilever and McCormick to fix concerns by November 18

Key facts

• The CMA set a November 18 deadline for remedies before it starts a Phase 2 investigation of the deal.
• The CMA said the merger would combine the two largest branded suppliers of dry ingredient mixes and dry pour-over sauces.
• The CMA found Nestle's Maggi, Premier Foods' Bisto and supermarket own-brands offer only limited competition in those markets.
• The CMA found no competition concerns in mustard, treating English, French and American-style mustard as separate product markets.
• Unilever said the referral was an expected step and that it is working with the CMA on a remedy.
• Unilever said discussions with potential buyers of the Colman's brand and assets are progressing.

The Competition and Markets Authority said on November 11 that Unilever and McCormick must offer remedies to its competition concerns by November 18 or the deal will face an in-depth, Phase 2 investigation. An in-depth review can clear a deal, clear it subject to remedies such as asset sales, or block it.

The CMA's initial review found a realistic prospect of a substantial lessening of competition in the supply of dry ingredient mixes, such as chilli con carne mixes, and dry sauces, such as parsley sauce, to UK retailers. It said the merger would combine the two largest branded suppliers in those categories, and that Nestle's Maggi, Premier Foods' Bisto and supermarket own-brands offered only limited competition. Limited shelf space and the brands' established positions made new entry unlikely, the regulator said.

The CMA examined mustard separately and found no competition concerns, concluding that English, French and American-style mustard are separate product markets because shoppers do not treat them as close substitutes. It said Unilever's Colman's and Maille brands therefore do not compete closely with McCormick's French's brand.

Unilever said in March it would combine its food business with McCormick to create a company worth around $65 billion. A Unilever spokesperson said the referral was "an expected step in the regulatory process" and that the company was working constructively with the CMA on a suitable remedy, adding that a decision had already been taken in August to market the Colman's brand and assets for sale and that discussions with potential buyers were progressing well. McCormick said it was also working constructively with the watchdog.