Britain's Office of Fair Trading has referred Kerry Group's takeover of Headland Foods to the Competition Commission for further investigation after customers complained about significant price rises following the deal.
Before the takeover in January 2011, Headland and Kerry were by far the two largest suppliers of frozen ready meals to British retail customers such as supermarkets.
'Significant price rises after any completed acquisition give the OFT cause for concern.
'In this case, the merged company's large share in the frozen ready meals market compared with that of its competitors corroborated that concern, as did the strength of complaints from retail customers,' Amelia Fletcher, chief economist at the OFT, said in a statement.
'Though increases in raw material costs may justify part of the increase, this did not fully allay our concerns. The merger will therefore be referred to the Competition Commission for an in-depth investigation.'
