Markets Wired

Today the Federal Trade Commission filed an administrative complaint (a public version of which will be available and linked to this news release as soon as possible) challenging Post Holdings, Inc.’s proposed acquisition of TreeHouse Foods, Inc.’s private label ready-to-eat cereal business. Post and TreeHouse are two of only three significant manufacturers and distributors of private label ready-to-eat cereal in the United States. The acquisition would give Post more than a 60 percent share of an already highly concentrated market and eliminate the vigorous competition between them to serve grocers across the country. The proposed merger would remove the competitive pressure that has driven higher quality and lower priced cereals for American families.

Ready-to-eat cereals are a staple of American breakfasts. These cereals do not require any preparation before consumption. Nearly every grocer offers a selection of ready-to-eat cereals in their stores. In addition to carrying national brands of ready-to-eat cereals, many stores offer private label ready-to-eat cereals, with the retailer’s own trade name.

“Households nationwide benefit from the robust competition between Post and TreeHouse, and a merger between these companies would likely lead to higher prices and reduced quality of the store-brand cereals that consumers enjoy today,” said Ian Conner, Deputy Director of the FTC’s Bureau of Competition.

The Commission also authorized FTC staff to seek a temporary restraining order and a preliminary injunction in federal court, if necessary, to prevent the parties from consummating the merger, and to maintain the status quo pending the conclusion of the administrative proceeding.

The Commission votes to issue the administrative complaint and to authorize staff to seek a temporary restraining order and preliminary injunction were both 5-0.  The administrative trial is scheduled to begin on May 27, 2020.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about how competition benefits consumers or file an antitrust complaint. Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.