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Press releases 2013 -

OFT accepts offer from Nakano to sell Burntwood vinegar plant to remedy merger concerns

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19/13    26 February 2013

The OFT has today accepted undertakings offered by Nakano UK Holding Limited (Nakano) to sell its Burntwood vinegar plant in Staffordshire to Baxters Food Group Limited (Baxters).

The undertakings have been accepted in order to remedy competition concerns arising from Nakano's completed acquisition of the vinegar and pickles businesses of Premier Foods Group Limited (Premier). As a result, the merger will not be referred to the Competition Commission (CC).

The OFT announced on 26 September 2012 that it was suspending its duty to refer the merger to the CC because it was considering whether to accept undertakings in lieu of a reference. The parties are the only two manufacturers of unbranded malt and spirit vinegar in the UK and the largest suppliers of these products to food processor customers (who use them in the manufacture of pickles and sauces), food service customers (including wholesalers and fish and chip shops) and supermarkets.

Before accepting the undertakings the OFT carefully assessed and consulted publicly on the proposed undertakings, including on the suitability of Baxters as the upfront buyer. The OFT did not receive any concerns in response to its public consultation and on the basis of the evidence before it has concluded that the undertakings are appropriate to remedy the competition concerns it has identified.

Ali Nikpay, OFT Senior Director and Decision Maker in this case, said:

'The OFT was concerned that prices of unbranded malt and spirit vinegar would rise as a result of Nakano's acquisition of Premier's vinegar business, which resulted in a merger to monopoly for some customers. The sale of the Burntwood plant to Baxters restores pre-existing levels of competition in the manufacture and supply of these vinegars to UK customers.'


  1. The undertakings can be downloaded from the Undertakings in lieu of reference page.
  2. The Reference Test - in the case of a completed merger, the OFT has a duty to make a reference to the CC if the OFT believes that it is or may be the case that a relevant merger situation has been created; and the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.
  3. Under the Enterprise Act 2002 a relevant merger situation is or will be created if two or more enterprises have ceased or will cease to be distinct enterprises, and the value of the turnover in the United Kingdom of the enterprise being taken over exceeds £70 million; or as a result of the transaction, in relation to the supply of goods or services of any description, a 25 per cent share of supply in the UK (or a substantial part thereof) is created or enhanced.
  4. Undertakings in lieu of a reference - Section 73 of the Enterprise Act 2002 provides for the option of accepting undertakings, instead of making a reference, for the purpose of remedying, mitigating or preventing the substantial lessening of competition concerned, or any adverse effect which has or may have resulted from it or may be expected to result from it. The Act provides that for such a purpose, the OFT may accept from such of the parties concerned as it considers appropriate undertakings to take such action as it considers appropriate. In doing so, the OFT will have regard in particular to the need to achieve as comprehensive a solution as is reasonable and practicable to the substantial lessening of competition and any adverse effects resulting from it. The OFT is required to consult publicly before accepting any such undertakings.
  5. The OFT consultation - the OFT consulted on the UILs and on Baxters as an effective buyer from 1 February 2013 to 22 February 2013. 
  6. Upfront buyer requirement - the OFT considered in this case that a necessary precursor to accepting undertakings in lieu was that the divestiture should be agreed up-front to a suitable buyer approved by the OFT. This meant that the OFT has consulted publicly on the suitability of the proposed buyer, as well as all other aspects of the draft undertakings, during the public consultation period.
  7. The text of this decision will be placed in the mergers section as soon as is reasonably practicable.

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