Cérélia Group Holdings SAS & Anor v Competition and Markets Authority

On judicial review of a merger decision, the Competition Appeal Tribunal must scrutinise whether the Competition and Markets Authority had adequate evidential material for its factual and evaluative conclusions. The intensity of review and the margin accorded to the CMA are context-specific. The Tribunal must not substitute its own decision.

Under section 39(3) of the Enterprise Act 2002, “special reasons” for extending a Phase II timetable are not confined to exceptional external events. They may include a combination of unresolved issues and substantial late material which prevents a fair and thorough report within the ordinary period. An unlawful extension would not automatically nullify a final decision; relief remains discretionary.

Cérélia acquired the UK and Ireland Jus-Rol dough business. Following a Phase II investigation, the Competition and Markets Authority found that the completed merger substantially lessened competition in the wholesale supply of dough-to-bake products to UK grocery retailers. It required divestiture of the Jus-Rol UK business.

The Competition Appeal Tribunal upheld the decision: [2023] CAT 54. Cérélia appealed, challenging the conclusions that Bells and Henglein would provide only limited competitive constraints. It also challenged the eight-week extension of the statutory reporting period under section 39(3) of the Enterprise Act 2002, and advanced consultation and nullity arguments.

1. Appeal dismissed. The Court upheld the CAT’s conclusion that the CMA had acted lawfully and rationally.

2. Under section 120(4) of the Enterprise Act 2002, the CAT applies judicial-review principles, but its specialist constitution enables it to examine the evidence closely and decide whether there was adequate material for the CMA’s conclusion. The intensity of review and the margin of deference depend on the issue. A detailed evidential review does not amount to substituting the CAT’s view for that of the CMA. This was consistent with [2004] EWCA 142.

3. The CMA’s conclusions on Bells and Henglein rested on sufficient evidence. Its assessment was qualitative and prospective, and the evidence was mixed. It was rationally open to the CMA to conclude that each rival imposed only a limited constraint, insufficient to offset the substantial lessening of competition. The Court refused permission to raise the new market-share point, since it could have been raised earlier and might have required further factual investigation.

4. There was no material change between the provisional findings and final report on Henglein. The provisional findings had adequately conveyed that Henglein’s constraint was limited, particularly for large retailers. Cérélia therefore had an adequate gist of the adverse case and no further consultation was required. Permission to advance that consultation point was granted, but the point failed.

5. “Special reasons” in section 39(3) do not require an exceptional, extraordinary or external event. The CMA has a broad, fact-sensitive discretion, subject to legal review. Here, the unresolved breadth of the issues and the substantial volume of material submitted by the parties made an extension necessary for a fair and thorough investigation. The extension notice was insufficiently particularised, but the accepted witness evidence elaborated rather than added to its reasons.

6. The Court additionally held, on an expressly academic hypothesis, that an unlawful extension would not automatically render the final decision a nullity. Public decisions remain effective unless set aside, and section 120(5) gives the CAT a discretion over relief. The public interest in remedying an established substantial lessening of competition, and the inevitability of the same outcome, justified refusing to quash.

• Court of Appeal (Civil Division): Appeal dismissed: [2024] EWCA Civ 352.
• Competition Appeal Tribunal: Upheld the CMA’s merger decision and divestiture remedy: [2023] CAT 54.