The Competition and Markets Authority (CMA) is proposing to accept remedies offered following its investigation into the £1.2bn merger deal between Greencore and Bakkavor.

The regulator said following its Phase 1 investigation that the deal could lead to "substantial lessening of competition" in the supply of own-label chilled sauces in the UK.

Both Greencore, which is a food manufacturer, supplier and distributor in the UK, and Bakkavor, a multinational manufacturer and supplier of fresh prepared foods across the UK, Ireland and the US, sell their products to supermarkets and grocery retailers such as Tesco, Marks & Spencer, Sainsbury’s, Waitrose and Asda.

In order to resolve the CMA’s concerns, the businesses have offered to sell Greencore’s only chilled sauce and soups manufacturing plant in Bristol.

Having considered the proposals, the regulator believes this measure could resolve its competition concerns and will consult on the composition of the remedies package and the potential purchaser in due course.

Executive director of mergers at the CMA, Joel Bamford, said: "The cost of our weekly shop matters to us all, so we must take decisions that ensure there is effective competition helping to keep product prices as low as possible on supermarket shelves. Our assessment found Greencore's deal to buy Bakkavor could raise prices at the till.

"Following close engagement with Greencore and Bakkavor we've secured remedies which we believe have the potential to address our competition concerns - so we have accepted the remedies in principle today and will now work to towards a final resolution."

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