FDBusiness.com

European Commission Approves Sysco’s Acquisition of Brakes

 Breaking News
  • Müller Completes Largest Single Investment in Scottish Dairy Processing in a Decade Müller Milk & Ingredients has completed a £15 million project to substantially upgrade Scotland’s largest fresh milk dairy in Bellshill and secure 265 jobs. The project represents the largest single investment in Scottish dairy processing for more than a decade. It gives Müller’s Bellshill dairy the capacity to process more than 370 million litres of fresh [...]...
  • Changing Consumer Habits to Shape EU Agricultural Markets by 2030 The European Commission has published projections for the European agricultural markets to 2030 for a wide range of agri-food products, including meat, arable crops, milk and dairy products, and fruit and vegetables. The evolution of agricultural income and the environmental aspects of EU agriculture are also covered, as well as a special focus on the [...]...
  • Irish Grass-fed Beef – Opportunities For Healthier Diets Ireland’s climate means that the country is good at growing grass. It is well known that producing beef from grass results in lower costs than feeding animals on concentrates. But what about the consumer? Is grass-fed beef better than other types of beef for consumers? This was the focus of a Department of Agriculture, Food and [...]...
  • Change of Leadership at Edrington Edrington, the international premium spirits company, has announced that chief executive officer Ian Curle will retire in March 2019 after 15 years in that role. His successor will be Scott McCroskie, who is currently a member of the Edrington board and managing director of The Macallan. Ian Curle joined the business in 1986 through Edrington’s subsidiary [...]...
  • Guinness to Sponsor Six Nations Rugby The iconic global brand Guinness is to become the new title sponsor of the Six Nations, with the Championship to be known as the Guinness Six Nations from 2019. The Six Nations is one of the world’s best attended sports events and regularly attracts record TV and online audiences in the UK, France, Ireland, Italy [...]...

European Commission Approves Sysco’s Acquisition of Brakes

European Commission Approves Sysco’s Acquisition of Brakes
June 10
12:30 2016

The European Commission has cleared the proposed acquisition of Brakes, the largest UK food distributor, by Sysco, the largest US food distributor. The Commission found that the takeover would not adversely affect competition in Europe.

Both companies are full range distributors, delivering a broad variety of chilled, frozen and ambient food across all product categories and across all sectors of the foodservice industry. They focus their activities on “delivered wholesale” distribution which means that they purchase food from manufacturers, stock it in warehouses and sell it on to the foodservice customers.

Sysco’s activities in the European Economic Area (EEA) are carried out mainly through its subsidiary Pallas, which is active in the island of Ireland (Republic of Ireland and Northern Ireland). Brakes’ business is mainly focused in the United Kingdom (where it is the largest foodservice distributor), France and Sweden, but it also sells in the Republic of Ireland. The companies’ activities mainly overlap in the island of Ireland.

The Commission examined the effects of the merger on competition in the areas of “delivered wholesale” distribution by full range suppliers to national and independent customers in the island of Ireland. National customers are customers with numerous foodservice outlets spread around the island of Ireland whereas independent customers have a more limited number of foodservice outlets.

The Commission’s investigation showed that several full range distributors able to supply national and independent customers on the island of Ireland will remain active in the market after the takeover. These include BWG, Henderson, Lynas and Musgrave. Moreover, it is not difficult for competitors to expand to other geographic areas by opening new warehouses at relatively low cost. The Commission’s investigation also found that specialist distributors (focussing on particular food categories such as meat or dairy) can exert a competitive constraint on full range distributors in their areas of specialty.

Data submitted by the companies also showed that Sysco and Brakes are not particularly close competitors in terms of bidding for public and private contracts. National customers, who tend to award contracts through a bidding process (contracts have an average duration of three years) are able to switch once a new tender is launched. Independent customers, who tend to place ad hoc orders, confirmed that it was relatively easy to switch to other distributors.

Finally, the Commission investigated complaints raised during the course of the market investigation that the merged entity could shut out competitors by forcing certain specialist food manufacturers to enter into exclusive arrangements. The Commission concluded that these concerns were unlikely to materialise, because the proposed acquisition will not increase Sysco’s spending power on food purchasing to the extent that it would change Sysco’s ability or incentives to shut out other players.

The transaction was notified to the Commission on 29 April 2016.

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • June 18, 2019Multimodal 2019
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements