UK watchdog warns T&L Sugars deal with Tereos may raise sugar prices

By Prerna Bedi and Sybille de La Hamaide

(Reuters) -Britain's antitrust regulator said on Friday that T&L Sugars' purchase of Tereos UK & Ireland's assets could result in higher sugar prices for UK shoppers.

T&L Sugars, which refines and distributes packaged sugar across supermarkets in the UK, under brand name Tate& Lyle bought Tereos' consumer facing operations in the UK and a distribution facility in West Yorkshire in November 2023.

The deal, if approved, would see two of the three sugar suppliers in the UK merge, leaving Associated British Food's British Sugar as its only competitor, the Competition and Markets Authority (CMA) said.

The deal could be referred to a deeper probe if the parties fail to offer remedies within five working days, CMA added.

"The supply of sugar to grocery retailers in the UK is already highly concentrated. This deal would bring together two of the three players in the UK sugar sector, reducing competition and choice further for people and businesses," said Sorcha O'Carroll, senior director of mergers at the CMA, in a statement.

T&L Sugars was sold by food ingredients maker Tate& Lyle in 2010 to U.S. based cane sugar refiner ASR Group, which retained the eponymous brand name, a popular pick for packaged sugar among British shoppers.

ABF said it expected sugar production in 2024 to be "significantly above" year ago levels while reporting a 3.8% rise in quarterly revenues at its British sugar unit in January.

Both companies, in reply to Reuters' request to comment, said they were still assessing CMA's decision.

"We will be absorbing the CMA feedback over the next few days and deciding how to progress from there," a spokesperson for T&L said in an emailed statement.

(Reporting by Prerna Bedi and Sybille de La Hamaide; Editing by Eileen Soreng and Rashmi Aich)