The ACCC will not oppose Sanitarium’s proposed acquisition of Vita Brits.
Its review focused on how closely Weet-Bix, manufactured and supplied by Sanitarium, 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.
Nestlé (under the Uncle Tobys brand) currently supplies Vita Brits, a competing wheat biscuit cereal product. They are, however, manufactured by Sanitarium.
The proposed acquisition involves Vita Brits branding, intellectual property and goodwill. It doesn’t include the Uncle Tobys branding or any manufacturing assets.
The ACCC’s analysis of data to assess whether consumers would switch between Weet-Bix and Vita Brits products in response to price changes 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,” says ACCC Commissioner Dr Philip 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.”
The ACCC also considered closely the viability of the Vita Brits product without the acquisition, following Nestlé’s loss of Vita Brits manufacturing capability.