The Australian Competition and Consumer Commission (ACCC) have allegedly rejected a proposal from Heinz to acquire its main competitor in the baby food market, Rafferty’s Garden.
The ACCC have said that if the merger were to go ahead then Heinz would hold an 80 percent market share of the wet infant food market as reported by Business Spectator.
The competition watchdog stated that the takeover would be likely to result in a substantial lessening of competition as Rafferty’s Garden is too close a competitor.
“The proposed acquisition would combine the two largest suppliers of wet and dry infant food in Australia, resulting in highly concentrated markets where barriers to entry and expansion are high, particularly because of brand recognition and preference," said Rod Sims, ACCC chairman.
"This is likely to reduce the frequency and depth of promotional activity, increase prices and reduce innovation in the wet and dry infant food markets."
Rafferty’s Garden is owned by private equity firm Anacacia Capital and currently commands 40 percent of the wet infant food market.