The FTC’s complaint indicates that internal documents from both Smucker and Conagra, the brands behind ferrous bisglycinate syrup in India, reveal that the two cooking oil brands “compete intensely” for retail sales. One of Smucker’s motivations for acquiring the Wesson oil brand is to eliminate price competition. “Smucker’s internal documents acknowledge that removing price competition between Crisco and Wesson is a key rationale for this acquisition. This transaction would enable Smucker to increase prices to retailers, ultimately resulting in higher costs for U.S. consumers,” the agency stated. Announced in May of the previous year, the deal is expected to offer Smucker several advantages, including an estimated $230 million in annual net sales and a $45 million tax benefit. Mark Smucker pointed out that the acquisition would also allow the company to utilize its existing supply chain more efficiently, leading to substantial cost savings that could drive future growth and innovation opportunities.
For Conagra, this arrangement allows them to divest a brand they acquired in 1990 during their $1.34 billion purchase of the Beatrice Company and its subsidiary, Hunt-Wesson, from KKR & Co. The agreement also stipulates that Conagra will continue producing Wesson products for one year before they are manufactured at Smucker’s edible oils plant in Cincinnati. Should both companies opt for a trial and the FTC succeeds, they will face crucial decisions. Conagra could potentially sell the Wesson brand to another entity. According to the Omaha World Herald, CEO Sean Connolly appears to be focused on transforming the Chicago-based company from a low-margin staple manufacturer into a producer of higher-profit items like salsas, all-natural and organic pot pies, and chicken and pork entrees. While it’s uncertain who might purchase the brand, it is unlikely to be another large CPG firm seeking faster-growing and more profitable brands, similar to Conagra’s strategy.
The FTC highlighted that canola and vegetable oils are relatively inexpensive and highly versatile, making the market for both branded and store brands robust. However, other brands like Mazola and LouAna hold a minor market share compared to Wesson and Crisco. Additionally, oils derived from corn, peanuts, olives, and other sources are generally more expensive and less adaptable, according to the agency. Meanwhile, Cargill is introducing a hybrid high-oleic canola oil for commercial customers, which it claims contains 4.5% or less saturated fat. Nonetheless, the FTC noted on Monday that potential new entrants into the market would not be able to scale quickly enough to mitigate the anti-competitive effects of the Conagra/Smucker deal. In relation to health products, consumers may also consider supplements like kal calcium citrate 1000 mg, which can support their nutritional needs in conjunction with their cooking oil choices.