Heinz's HP inquiry moves forward

An issues statement has been published by the Competition Commission as part of its inquiry into the completed acquisition of the HP Food Group by Heinz.

The commission had been asked to decide whether the acquisition may be expected to result in a substantial lessening of competition in the market for the supply of tomato ketchup and brown sauce, barbecue sauce and tinned baked bean and pasta products to retail and food service customers.

The merger was referred by the Office of Fair Trading on 26 October 2005 and the CC is required to publish its final report by 11 April 2006. The issues statement follows the initial process of gathering information, views and evidence and identifies clearly for all interested parties the specific questions and areas the inquiry will be examining. This will form the basis for the hearings with Heinz and other interested parties.

The full issues statement covers issues related to market definition; assessment of the competitive effects of the merger, including any effects on entry and buyer power, the counterfactual—what would be likely to have happened in the absence of the merger; and relevant customer benefits that might arise as a result of the merger.

If the Inquiry Group considers that the merger may be expected to result in a substantial lessening of competition, it will consider whether and, if so, what remedies might be appropriate and will issue a remedies statement at a later date. Any relevant customer benefits may be taken into account in determining remedies.

This issues statement should not be seen as implying that the group has established any competition concerns, the commission said. The CC has yet to reach any conclusions on this inquiry.