Decision Nº M/04/043 from Competition and Consumer Protection Commission, 2004-08-27

• Jurisdiction: Ireland
• Parties: Associated British Foods,Burns Philp Netherlands European Holdings BV
• Date: 27 August 2004
• Decision Date: 27 August 2004
• Status: Preliminary investigation (Phase 1)
• Court: Competition and Consumer Protection Commission (Ireland)
• Decision Number: M/04/043

Determination of the Competition Authority

Determination No. M/04/043 of the Competition Authority, dated 27

August 2004, under Section 21of the Competition Act, 2002

Notification No. M/04/043 – The proposed acquisition by Associated

British Foods plc of Burns Philp Netherlands European Holdings BV

Introduction

1. On 30 July 2004 the Competition Authority, in accordance with Section 18(1)

of the Competition Act, 2002 (“the Act”) was notified, on a mandatory basis,

of a proposal whereby Associated British Foods plc. (“ABF”) would acquire

Burns Philp Netherlands European Holdings BV (“the Target”) (“the proposed

acquisition”). The Target constitutes the entire global yeast manufacture and

supply business of Burns Philp & Company Limited (“Burns Philp”). The

proposed acquisition is global and has been notified to the relevant

authorities in other jurisdictions.

The Parties

2. ABF is an international food, food ingredients and retail group, headquartered

in the UK. ABF has substantial presence in Europe, Australasia and North

America and employs over 35,000 people. Several subsidiaries of ABF

operate in the State in various business sectors, and the group’s total

turnover in the State in its most recent financial year was about €[…].

3. Burns Philp, the parent company of the Target, is headquartered in Australia,

and is a global manufacturer and supplier of yeast, food ingredients and

branded food products. The Target is comprised of 42 manufacturing facilities

in 23 countries. Burns Philp mainly operates in the State through the Target’s

shareholding in Proofex Products Company (“Proofex”).

Overlap

4. ABF and the Target each hold a […]% share in Proofex, the only

manufacturer of yeast in the State. Irish Sugar holds the remaining […]%

share. Post-acquisition, ABF and Irish Sugar would jointly own Proofex […].

The parties submit that, irrespective of the final shareholding ratio, ABF &

Irish Sugar would exercise joint control of Proofex, post-acquisition.

Relevant Product Market

5. Yeast is the essential, non-substitutable microorganism that makes bread and

other bakery products rise. “Cream yeast” and “compressed yeast” are

together described as “fresh yeast”, which has a shelf life of 2-4 weeks and

must be refrigerated. “Dry yeast” is more concentrated, has a shelf life of

about two years, and does not require refrigeration, but otherwise it has the

same basic characteristics as fresh yeast. Most yeast sold in the State is

bakers’ yeast, which is an ingredient in bread and other bakery products. The

Authority focused its investigation on fresh bakers’ yeast for three reasons:

first, it is the product manufactured by Proofex; second, dry yeast is freely

available from many international sources; and third, most modern industrial

bakeries are purpose-built to utilise cream yeast, which is favoured for its

quality and ease of use. Market enquiries indicate that for Irish commercial

bakeries there is very limited demand-side substitutability between fresh and

dry baker’s yeast, hence the supply of fresh baker’s yeast is the relevant

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