Sanitarium's proposed acquisition of Vita Brits not opposed

The ACCC will not oppose Australian Health & Nutrition Association Limited’s (Sanitarium) proposed acquisition of the brand and intellectual property assets necessary for the supply of Vita Brits from Société des Produits Nestlé S.A. and Nestlé Australia Ltd (together, Nestlé).

Claimed as the leading wheat biscuit brand in Australia, Weet-Bix is made by Sanitarium using 97% wholegrain wheat. Vita Brits is part of Nestlé’s Uncle Tobys brand and is physically similar to Weet-Bix, made from 99% wholegrain wheat. Sanitarium is also currently manufacturing Vita Brits for Nestlé.

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. We found that the proposed acquisition would not be likely to substantially lessen competition,” ACCC Commissioner Dr Philip Williams said.

The ACCC also closely considered the viability of the Vita Brits product without the acquisition, following Nestlé’s loss of Vita Brits manufacturing capability.

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