Mars' Acquisition of Kellogg's: EU Commission Warns of Potential Price Hikes
Mars Acquires Pringles Brand: EU Commission Expresses Concerns Over Potential Price Increases
Facebook Twitter Whatsapp E-Mail Print Copy Link The EU Commission issues a warning over the proposed acquisition of Kellogg’s by Mars, fearing an increase in consumer prices. The Commission claims this is due to the enhanced negotiating power Mars would possess with retailers in the EU.
In the eyes of the average German, Mars is synonymous with chocolate (Mars, Snickers, Bounty), gum (Airwaves, Wrigley's Extra), pet food (Whiskas, Chappi), and common staples like rice (Ben's Original) and pasta (Mirácoli). With more than 150,000 employees and reported annual revenue exceeding 45 billion euros in 2023, Mars is a dominant player in the food industry.
Kellogg's, on the other hand, is renowned for its brands such as Pringles and Kellogg's cereals. The company raked in a net revenue of around 11.8 billion euros in 2023, operates in around 180 countries worldwide, and employs approximately 23,000 people.
Preliminary investigations by the Commission suggest that Mars, with the addition of Kellogg’s popular brands to its portfolio, could exert greater influence over retailers. This newfound power may allow Mars to demand higher prices during negotiations, ultimately leading to increased costs for consumers, according to the Commission.
The EU Commission's concerns are based on Mars' amplified negotiating power with retailers due to the acquisition of Kellogg's. Several retailers have expressed their own reservations about this potential hike in Mars' bargaining power. As a result, the Commission has initiated an in-depth examination focusing specifically on the impact of the merger on product prices and market competition.
Sources: ntv.de, dpa
Additional Insights:
The European Commission's investigation is reminiscent of similar reviews over high-profile mergers in the food industry, such as Procter & Gamble’s acquisition of Hilite International and Danone’s combination with WhiteWave Foods2. In each case, concerns have been raised regarding the impact on consumer prices and market competition. The Commission's scrutiny of the Mars-Kellogg’s merger is therefore in line with its ongoing efforts to ensure fair competition within the European Economic Area.
- The European Commission's investigation of Mars' proposed acquisition of Kellogg's extends beyond the food-and-drink industry, as it also focuses on the potential impact on vocational training and community policy, given Mars' dominant position in the market.
- Industry experts suggest that the merger could influence not only consumer prices but also the business landscape, potentially leading to changes in the finance and lifestyle sectors, as Mars' expansion into new markets through the acquisition of Kellogg's could stimulate vocational training programs and create new job opportunities.
- With the addition of Kellogg's to its portfolio, Mars could potentially use its enhanced bargaining power in negotiations with retailers to demand higher prices for food-and-drink products, but this could also lead to a need for increased vocational training for employees in various industries to adapt to the changing business environment.
