The Australian Competition & Consumer Commission (ACCC) has reached an early decision on the proposed merger of Sanitarium’s Weet-Bix and Nestlé’s Uncle Tobys Vita Brits, stating that it will not oppose the acquisition.
The ACCC reported at the end of September that Sanitarium proposed to acquire Vita Brits branding, intellectual property assets and goodwill. The deal did not include the Uncle Tobys branding or any manufacturing assets.
Australian Health & Nutrition Association, trading as Sanitarium, is a registered not-for-profit organisation wholly owned by the Seventh-day Adventist Church. Weet-Bix is the leading wheat biscuit brand in Australia, Sanitarium’s flagship product, which has a range including Weet-Bix Bites, Weet-Bix Gluten Free, and Weet-Bix Added Benefits.
Nestlé Australia is a subsidiary of the Swiss-based, global food and beverage company, Nestlé S.A. Vita Brits are a physically similar, rectangular wheat biscuit product to Weet-Bix, which are currently manufactured by Sanitarium for Nestlé due to a toll manufacturing agreement.
Due to possible concerns for competitors in the breakfast cereal industry, the ACCC conducted a review focused on how closely Weet-Bix and Vita Brits compete in the wholesale supply of wheat biscuit cereal and the future of the Vita Brits product should it not be acquired by Sanitarium. Main points of interest included the likely impact on prices and product quality post-acquisition.
ACCC Commissioner Dr. Philip Williams said the organisation's data analysis indicated that although the products are similar in nature, Vita Brits is unlikely to be a strong competitive constraint on Weet-Bix in the absence of the proposed acquisition.
“We tested the closeness of competition between the Weet-Bix and Vita Brits products and found that consumers do not typically switch between the two,” said Williams.
“This finding was consistent with the feedback we received from market inquiries. We found that the proposed acquisition would not be likely to substantially lessen competition.”
Initially expected by 21 November, the results of the review were announced on 1 November, giving Sanitarium the go-ahead to progress with negotiations.
