Image: Sanitarium
The ACCC has announced it does not oppose Sanitarium’s proposed acquisition of the brand and intellectual property assets necessary for the supply of Vita Brits from Nestlé.
Sanitarium manufactures and supplies Weet-Bix and also manufactures private label wheat biscuit cereals. Nestlé (under the Uncle Tobys brand) supplies Vita Brits, a competing wheat biscuit cereal product, but currently Vita Brits are manufactured by Sanitarium.
The proposed acquisition involves Vita Brits branding, intellectual property and goodwill. It does not include the Uncle Tobys branding or any manufacturing assets.
The ACCC’s review focused on how closely Weet-Bix and Vita Brits compete in the wholesale supply of wheat biscuit cereal and the future of the Vita Brits product should it not be acquired by Sanitarium.
The ACCC’s analysis of data to assess whether consumers would switch between Weet-Bix and Vita Brits products in response to price changes indicated that, although the products are similar in nature, Vita Brits is unlikely to be a strong competitive constraint on Weet-Bix in the absence of the proposed acquisition.
“We tested the closeness of competition between the Weet-Bix and Vita Brits products and found that consumers do not typically switch between the two. This finding was consistent with the feedback we received from market inquiries,” said ACCC Commissioner Dr. Philip Williams.
“We found that the proposed acquisition would not be likely to substantially lessen competition.”
The ACCC also considered closely the viability of the Vita Brits product without the acquisition, following Nestlé’s loss of Vita Brits manufacturing capability.
