Health food company, Sanitarium, has proposed a merger of its popular Weet-Bix brand with Nestlé’s Uncle Tobys brand Vita Brits wheat biscuits. The Australian Competition & Consumer Commission (ACCC) is reviewing the deal, investigating how it will impact pricing, quality, and competition.
Australian Health & Nutrition Association, trading as Sanitarium, is a registered not-for-profit organisation wholly owned by the Seventh-day Adventist Church. Weet-Bix is the leading wheat biscuit brand in Australia, Sanitarium’s flagship product, which has a range including Weet-Bix Bites, Weet-Bix Gluten Free, and Weet-Bix Added Benefits.
Nestlé Australia is a subsidiary of the Swiss-based, global food and beverage company, Nestlé S.A. Vita Brits are a physically similar, rectangular wheat biscuit product to Weet-Bix, which are currently manufactured by Sanitarium for Nestlé due to a toll manufacturing agreement.
The ACCC reported Sanitarium has proposed to acquire Vita Brits branding, intellectual property assets and goodwill. The deal does not include the Uncle Tobys branding or any manufacturing assets.
Due to Section 50 of the Competition and Consumer Act 2010, which prohibits acquisitions that are likely to have the effect of substantially lessening competition in a market, the ACCC is taking submissions from interested parties regarding the deal, until 4 October.
The points of interest were stated to be in how closely Weet-Bix and Vita Brits compete in the supply of breakfast cereals, and the likely impact on prices and product quality post-acquisition.
The organisation proposed the findings would be released on 21 November, which may include a final decision on the merger.
