The United Kingdom’s Competition Commission has ruled that Noble Foods Ltd., created last year in the merger of the nation’s top two egg companies, must sell Kent Holdings Ltd., the parent company of Stonegate Farmers Ltd. to maintain competition in shell eggs in the U.K. Noble controls 70% of the British egg market.
In its final report, the Competition Commission says that the merger is likely to lead to a lessening of competition in the market of shell eggs to retailers, and for the procurement of eggs from producers. As a result, the CC says, the merger is likely to lead to higher prices of eggs for customers.
An article in the Telegraph says that effectively nixing the merger is “widely viewed as another victory for supermarket retailers over the farming community.” The reason why, the article says, “is that the enlarged company, it was hoped, would have had enough clout to negotiate better prices with major food chains, such as Tesco and J Sansbury. However, some retailers had argued that their ability to switch to alternative suppliers would be reduced as a result of the merger, as they would be unable to source enough eggs from other suppliers.”