Ruby Acquisitions Ltd (Oaktree Capital Management) / Richmond Foods PLC

OFT closed case: Anticipated acquisition by Ruby Acquisitions Limited (Oaktree Capital Management) of Richmond Foods plc.

Affected market: Manufacture and supply of ice cream

No. ME/2451/06

The OFT’s decision on reference under section 33 given on 29 June 2006. Full text published 13 July 2006.

Please note square brackets indicate information replaced by a range at the request of the parties for reasons of commercial confidentiality.


Ruby Acquisitions Limited (RAL) is a company ultimately controlled by Oaktree Capital Management, LLC (Oaktree), an investment management company. Oaktree currently controls (inter alia) companies in Germany and France which produce and sell ice cream (collectively referred to as Roncadin).

Richmond Foods PLC (Richmond) is a UK-based ice cream manufacturer. Richmond's UK turnover for the last financial year was approximately £137.5 million.


RAL has made a recommended offer for shares of Richmond which is to be implemented by way of a scheme of arrangement. The administrative deadline in this case expires on 19 July 2006.


As a result of this transaction, RAL and Richmond will cease to be distinct. The UK turnover of Richmond exceeds £70 million, so the turnover test in section 23(1)(b) of the Enterprise Act 2002 (the Act) is satisfied. The OFT therefore believes that it is or may be the case that arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a relevant merger situation.


The parties overlap in the supply of ice cream in the UK.

Product market

In previous merger cases, both the OFT and Competition Commission (CC) have considered separately supply to the food service (catering) sector and supply to the retail sector (see [Note 1]).

In respect of supply to the retail sector, the CC has previously concluded that impulse ice cream (i.e. ice cream purchased for immediate consumption) is best regarded as a separate market from ice cream taken home (take-home ice cream) (see [Note 2]).

Within the retail segment and food service segments it may be possible to distinguish between own-label ice cream and branded ice cream, and it may also be possible (within each segment) to further distinguish between super premium or luxury ice cream and other ice cream.

However, there is no need to conclude on the relevant frame of reference since competition concerns do not arise in this case on any basis.

Geographic market

The appropriate geographic frame of reference in this case is at least UK-wide since the major customers of the parties operate on a national basis. This is in line with previous OFT and CC decisions on consumer food products.


The activities of the parties mainly overlap in the supply of take-home ice cream in the UK (see [Note 3]). Richmond has an estimated share of supply of this market of [25-30] per cent; Roncadin's share is [less than 2] per cent (see [Note 4]). Significant competitors are Unilever and Masterfoods.

Considering the retail sector as a whole (i.e. take-home and impulse ice cream), the share of supply of the merged entity is around [25-30] per cent.

Considering the supply of own-label ice cream, Richmond has an estimated share of supply of [60-65] per cent; Roncadin's share is [less than 2] per cent. Roncadin does not supply three of the national multiples. Other significant suppliers of own-label ice cream are: Fredericks, Rolland, Ysco, Hill Station and Real Ice (see [Note 5]).

In this case, the increment to share of supply ([less than 2] per cent) indicates that the merger does not materially affect the structure of the market or the competitive dynamic. Third parties who responded to our inquiries did not raise any competition concerns.

Consequently, the OFT does not believe that it is or may be the case that the merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.


This merger will therefore not be referred to the Competition Commission under section 33(1) of the Act.


  1. For example, Competition Commission, HJ Heinz and HP Foods, 24 March 2006 and OFT, Bakkavor/Geest, 28 April 2005.
  2. Commission, The supply of impulse ice cream (Cm4510), January 2000 (paragraph. 2.24).
  3. A negligible overlap in supply of ice cream to the food service sector; the combined share of supply is less than 4 per cent. There is no overlap in respect of supply of super-premium/luxury branded ice cream.
  4. Of all share of supply data: RAL/Oaktree, based on data from AC Nielsen.
  5. To public sources some of these companies have significant spare capacity.
Published 28 June 2006