Buyout of British company could be blocked over sugar price rise concerns

The cost of adding a spoonful of sugar to a cup of tea could go up sharply if a deal to purchase a UK food manufacturer goes ahead, a watchdog has warned. The Competition and Markets Authority (CMA) has warned Tate & Lyle Sugars (TLS) that their expansion plans could create a monopoly in the sector, with just two businesses controlling the supply of sugar across the country.

Famous for its sugar and golden syrup brands, Tate & Lyle has been warned that the deal to purchase Tereos UK, owner of the Whitworths brand, could lead to a "substantial lessening of competition", which could mean consumers losing out as only two businesses would control the price of sugar. Alongside British Sugar, TLS accounts for 96.9 per cent of the domestic sugar market.

Originally a North West business based in Liverpool before its merger with London-based Lyle, Tate & Lyle has been an iconic British brand for over a century and among our most profitable businesses, being one of the founding companies of the FTSE100, then the FT-30. They have largely focused on cane sugars, but their plan to purchase Tereos UK would also make them the main name in selling sugar to customers.

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Plans to purchase Tereos UK were announced by Tate & Lyle Sugars (TLS) in November, but have been subject to review by the competition watchdog. Their only competitor, British Sugar, controls around two-thirds of the market but mostly produces sugar from sugar beet, which is grown in the UK.

Britain's sugar market has long been considered an oligopoly, essentially controlled by two or three businesses. If TLS' purchase of Tereos UK goes through, there would then only be two businesses shifting the sweet stuff