EU food mergers: when deals become anti-competitive summary
- EU assesses mergers case by case with no fixed market share threshold
- Deals above 40% share face scrutiny but require broader competition analysis
- European Commission often approves mergers with divestments rather than blocking
- Focus has shifted towards future competition innovation and ecosystem effects
- Increased scrutiny of killer acquisitions and consumer goods deals amid inflation
Large-scale mergers and acquisitions can transform entire markets overnight. This is just as true in food as in any other industry.
When two food companies merge, or one acquires another, their market share naturally grows, especially if the two were previously competitors.
In some cases, these mergers can threaten competition. Competition law in the EU puts mergers under significant scrutiny to ensure that this does not happen.
When is a deal anti-competitive?
While mergers and acquisitions often bring benefits to the economy, it is important that deals are not harmful to competition, according to the EU. Creating or strengthening a dominant player too much, it says, would give them excessive power over pricing, as well as lower innovation and reduce consumer choice.
There is no fixed threshold for market share over which a deal is considered anti-competitive in the EU, explains Oliver Geiss, competition law and FDI partner at law firm Squire Patton Boggs.
While a combined market share of more than 40% for a merged entity would generally be considered high, whether or not this actually is considered anti-competitive depends on more factors than just this.
How close the two parties are as competitors, the strength of the remaining competitors, the barriers to market expansion, and barriers to entry into the market also affect how the European Commission assesses the level of a deal’s threat to competition.
The European Union’s merger rules apply to all companies that do business in the EU, regardless of whether they are headquartered there.
If the annual turnover of a combined business’s global and European sales exceeds a certain threshold, the European Commission must be notified.
What happens when a deal is found to be anti-competitive?
While mergers can be blocked, it is rare. If the EU suspects that a deal has the potential to harm competition, it is far more likely to ask for commitments from the merged company to mitigate this than block the deal outright.
This has happened several times in the food sector. For example, in 2025 Belgian company Vandemoortele Group acquired French bakery chain Delifrance.
The Commission found that if the deal were to go ahead, the resulting company would be either the largest or second-largest supplier of frozen laminated dough products in several markets, and that they would face limited competitive constraints in raising prices.
To mitigate this, the parties committed to divest two Delifrance production sites in France.
Earlier, in 2022, the Commission found that the purchase of US-headquartered foodservice equipment company Welbilt by Ali Group would make the merged entity the largest manufacturer and supplier of ice-making machines in the European Economic Area, with limited competitive pressure. It was also deemed unlikely that a new competitor would step in.
To remedy this, the merged company agreed to divest Welbilt’s entire ice-making machine business.
Once the European Commission is satisfied with the commitments made to mitigate the risks to competition, it gives conditional clearance for the deal to go ahead. It then monitors the relevant merged company to ensure that it fulfils its commitments, and may intervene if it does not.
How has competition law changed?
The “core of competition law” has not changed substantially in the past decade, explains Squire Patton Boggs’ Geiss. However, how the system is enforced, and what it prioritises, has.
The Commission is increasingly focused on future competition, R&D, and products in the pipeline, rather than its prior focus mainly on short-term pricing effects and current market shares.
While prior focus for the EU was on how mergers would affect the markets the two parties were operating in, as well as supplier and customer relationships, focus is now more squarely on the broader ecosystem.
The Commission is also now more willing to scrutinise ‘killer acquisitions’, which is when a larger company buys a smaller one to nullify competition.
For example, when biotechnology company Illumina bought healthcare tech company Grail in 2024, the EU blocked the deal despite it not meeting the turnover thresholds (although this was later overturned by the European Court of Justice).
There will also be particular focus on consumer goods deals going forward. “The European Commission has a special focus on consumer goods given inflation and cost-of-living pressure in recent years. Major consumer goods deals will receive close attention”, explains Jordan Ellison, partner at law firm Slaughter and May.
Competition law is still changing. New draft merger guidelines were published on 30 April 2026, and are currently undergoing a consultation process until 26 June.
When mergers or acquisitions take place, both parties must be aware of the effect that this may have on competition. If the merged company is overwhelmingly dominant in the market, it will invite increased legal scrutiny.
