A preliminary investigation by the Commission cited possible competition worries in Germany and the UK, where Cargill and Barry Callebaut are the main suppliers of industrial chocolate.
Reduced choice of suppliers?
“The proposed transaction could eliminate an important competitor and reduce the choice of suitable suppliers in already concentrated markets, which could lead to price increases,” said the Commission in a release.
The investigation found that several smaller industrial chocolate suppliers had only a limited presence and posed an insufficient competitive constraint on Cargill and Barry Callebaut.
Cargill’s $440m proposal
Cargill announced it was to acquire all six of ADM’s chocolate plants as well as the Ambrosia, Merckens and Schokinag brands for $440m in September last year.
The deal excluded ADM’s capacity to produce semi-finished chocolate products such as cocoa butter and powder, which was later sold to Olam.
If the ADM deal clears, Cargill will keep its lead over Blommer but Barry Callebaut will remain the global market leader. Analysts previously said the deal would create “a duopoly” and a “two horse race” in industrial chocolate.
The Commission has 90 working days up until 8 July 2015 to investigate.