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

CourtCompetition and Consumer Protection Commission (Ireland)
PartiesAssociated British Foods,Burns Philp Netherlands European Holdings BV
Date27 August 2004
StatusPreliminary investigation (Phase 1)
Decision Date27 August 2004
Decision NumberM/04/043
Determination of the Competition Authority
Determination No. M/04/043 of the Competition Authority, dated 27
Notification No. M/04/043 – The proposed acquisition by Associated
British Foods plc of Burns Philp Netherlands European Holdings BV
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”).
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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