M/08/009 – Kerry/ Breeo Update
April 21, 2016
The Competition and Consumer Protection Commission (‘the CCPC’) has today announced the conclusion of a challenge taken by the former Competition Authority (‘the Authority’) in 2008 against the acquisition of Breeo Foods Limited and Breeo Brands Limited by Rye Investments Limited, an indirect, wholly-owned subsidiary of Kerry Group plc. The CCPC has decided not to proceed with its appeal to the Supreme Court and has agreed satisfactory settlement terms with Rye Investments Limited relating to the costs of the High Court and Supreme Court proceedings.
In August 2008, the former Competition Authority (now the CCPC) prohibited the implementation of a merger which involved the acquisition by Rye Investments Limited of Breeo Foods Limited and Breeo Brands Limited. Each of the parties involved owned and controlled a number of significant brands in the grocery sector. Following a detailed review of the affected markets, the Authority issued a Determination finding that the transaction was likely to result in a substantial lessening of competition in a number of product markets. Rye Investments Limited appealed to the High Court and in March 2009 the Authority’s prohibition decision was annulled by the High Court and the parties proceeded to implement the merger. In April 2009 the Authority appealed to the Supreme Court against the High Court judgment. The case was due to be heard by the Supreme Court at the end of April 2016.
Following the latest review of the case, taking all the circumstances of this case into account, particularly the passage of time since the High Court judgment, the CCPC has decided not to proceed with the appeal to the Supreme Court.
Additional Notes
Case Summary
On 28 August 2008, the Competition Authority (the Authority) prohibited the implementation of a merger which involved the acquisition by Rye Investments Limited, an indirect, wholly-owned subsidiary of Kerry Group plc, of Breeo Foods Limited and Breeo Brands Limited. Each of the parties involved owned and controlled a number of significant brands in the grocery sector. After a detailed and extended review of the affected markets, the Authority reached a Determination that the merger was likely to result in a substantial lessening of competition in a number of product markets (i.e. the product markets for rashers, non-poultry cooked meats and processed cheese). Rye Investments Limited appealed to the High Court and on 19 March 2009, Mr Justice Cooke in the High Court annulled the Authority’s prohibition decision, following which the parties proceeded to implement the merger. In April 2009, the Authority appealed to the Supreme Court against the High Court ruling. Pleadings in the case were completed in 2012 and the case was due to be heard by the Supreme Court at the end of April 2016.
Read the Competition Authority’s determination.
The Merger Review Process
The merger review function of the CCPC is governed by the Competition Act 2002. Under the 2002 Act, the CCPC is required to determine whether a proposed merger will or will not lead to a substantial lessening of competition in any market for goods or services in the State. The options open to the CCPC are therefore (i) to clear the merger unconditionally, (ii) to clear it subject to conditions or (iii) to prohibit its implementation. Once a proposed transaction is notified, the CCPC has 30 working days to make a Phase 1 determination (unless a Requirement for Further Information is issued to the parties, in which case the deadline is extended). On or before that date, the CCPC must either: (i) clear the proposed merger or (ii) move to a Phase 2 investigation. The CCPC then has a further 90 working days to complete a Phase 2 investigation which involves an in-depth investigation of the competition implications of a merger.
In 2015, the CCPC published fully reasoned decisions for the 78 mergers notified to it. This represented a substantial increase in output, as notified mergers increased by 90% from 2014 to 2015. This included six extended merger reviews and three Phase 2 investigations regarding the following transactions: Topaz/Esso, Baxter/Fannin and Valeo/Wardell (carried over from 2014). The CCPC’s clearances of the Valeo/Wardell and Topaz/Esso mergers each required significant structural divestments by the merging companies.
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