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CMA Fines Tereos £25,000 for Failing to Provide Key Information in Merger Probe

By  |  September 27, 2024
CMA Fines Tereos £25,000 for Failing to Provide Key Information in Merger Probe

The Competition and Markets Authority (CMA) has imposed a fine of £25,000 on Tereos SCA and its subsidiary, Tereos United Kingdom and Ireland Limited, for failing to provide essential information during an investigation into its merger with T&L Sugars. The fine comes as part of a larger phase 2 inquiry into the merger, where Tereos was found to have withheld relevant internal documents and minutes required for the CMA’s review.

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    According to a settlement reached between the CMA and Tereos, the sugar-producing giant was served with a notice under section 109 of the Enterprise Act 2002, demanding the submission of certain corporate governance documents. While Tereos initially responded, the CMA determined that the company’s reply was incomplete and unjustifiably narrow, per a statement by the authority. The CMA Inquiry Group concluded that Tereos’ failure to fully comply was capable of negatively affecting the investigation’s outcome.

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    Richard Feasey, Chair of the independent inquiry group overseeing the investigation, stressed the importance of cooperation in such matters, saying, “It’s important that firms respect the UK merger review process – which includes providing all the information we need to promptly progress our investigation.” Feasey added that Tereos’ decision to apply what he described as a “narrow, artificial interpretation” of the CMA’s requirements ultimately led to the fine.

    Read more: UK Watchdog Provisionally Clears Sugar Deal

    The fine highlights the CMA’s emphasis on receiving timely and comprehensive cooperation from businesses under scrutiny, as incomplete information can hinder its ability to make well-informed decisions aimed at benefiting consumers and the UK economy. According to the statement, had Tereos provided a full response in the first instance, the fine could have been avoided entirely.

    Currently, the maximum fine that can be imposed for such failures stands at £30,000. However, under upcoming changes introduced by the Digital Markets, Competition and Consumers Act 2024 (DMCCA), the penalty ceiling is set to increase significantly. Once the new legislation takes effect, businesses could face fines of up to 1% of their global turnover for non-compliance with information requests during investigations.

    Source: Gov UK