Acquirer: Cadbury Schweppes Pty Ltd, Cadbury Schweppes Plc; Target: Sunrise Confectioners (Aust) Pty Ltd

Summary

Cadbury Schweppes acquired Sunrise on 31 March 2003

Market definition

The market for wholesale sugar confectionery in Australia

Competition analysis

Cadbury Schweppes produces a range of sugar and chocolate confectionery. The business of Sunrise is concentrated in sugar confectionery. The parties submitted market share data indicating that Cadbury Schweppes' post-acquisition share of the wholesale sugar confectionery market would be 14.6% and that the pre-merger CR4 was 67.8%. Accordingly, it was considered that the Merger Guidelines thresholds for the exercise of unilateral market power would not be crossed by the acquisition. The market shares of the two largest players in the market, Nestle and Mars, were given as 33.8% and 16.7% respectively.

The acquisition was not considered to be likely to result in a substantial lessening of competition on the basis that concentration thresholds were not breached, imports were significant (10.5%) and Nestle and Mars were likely to prove vigorous competitors to the merged entity. Barriers to entry were also considered to be low.

Merger type

Horizontal

Guidelines thresholds

Below

Imports above 10%

Yes

Initiation

Parties

ANZSIC code

2172