Tie-up between Hotpoint and Beko businesses could harm competition – CMA

A planned tie-up between the electrical and white goods giants behind Hotpoint and Beko in Europe could reduce choice and increase prices for UK consumers, Britain’s competition watchdog has warned. The Competition and Markets Authority (CMA) said it found competition concerns surrounding Turkish firm Arcelik’s takeover of Whirlpool’s European domestic appliances business. The regulator said that unless Arcelik can address its worries, it will launch a full scale in-depth probe into the deal. Arcelik and Whirlpool’s position is particularly strong in the low to mid-range price categories of these domestic appliances, where they would face competition from only a small number of competitors The CMA said the merged company would be the biggest supplier of washing machines, tumble dryers, dishwashers and cooking appliances in the UK, a market worth over £3.8 billion. It said: ‘Arcelik and Whirlpool’s position is particularly strong in the low to mid-range price categories of these domestic appliances, where they would face competition from only a small number of competitors.’ Whirlpool makes household appliances, including the Hotpoint and Indesit brands, while Arcelik supplies home appliances and consumer electronics, such as the Beko and Grundig brands. The CMA’s concerns are centred around the firms’ supply of washing machines, tumble dryers, dishwashers and cooking appliances in the UK. The proposed deal will combine two major providers of home appliances in the UK, meaning that well-known brands such as Hotpoint, Indesit and Beko will sit under one owner. We’re worried that this could reduce the choice of suppliers available to retailers and ultimately to shoppers Sorcha O’Carroll, CMA senior director of mergers, said: ‘The proposed deal will combine two major providers of home appliances in the UK, meaning that well-known brands such as Hotpoint, Indesit and Beko will sit under one owner. ‘We’re worried that this could reduce the choice of suppliers available to retailers and ultimately to shoppers. ‘As competition from other suppliers in the low-mid price range appears to be limited, we are concerned that this tie-up could leave people paying more or receiving lower quality products. ‘Unless Arcelik offers a solution to address our concerns, we’ll move to an in-depth investigation.’ The companies have until October 5 to respond to the CMA with solutions to the competition concerns. The deal was announced in January, with plans for a new company to be formed made up of Arcelik’s and Whirlpool’s European domestic appliances businesses. Under the deal, Arcelik would own 75% of the combined company and Whirlpool the remaining 25%. The EU competition watchdog is also reviewing the deal and is set to reach a decision by October 23.