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US regulator raises concerns on J.M. Smucker, Conagra cooking oil deal

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US regulator raises concerns on J.M. Smucker, Conagra cooking oil deal

The U.S. Federal Trade Commission said it filed an administrative complaint against The J. M. Smucker Co.'s approximately $285 million deal to acquire Conagra Brands Inc.'s Wesson cooking oil brand, citing competition concerns.

According to the regulator, the addition of Wesson will put J. M. Smucker in control of at least 70% of the U.S. branded canola and vegetable oils market for grocery store and retailers as it currently owns the Crisco brand. This would lessen competition or tend to create a monopoly, the complaint alleges.

"After attempted price increases by each brand over the last two years were limited by intense competition from the other, this transaction eliminates that restraint and would allow Smucker to raise prices on both brands," said Ian Conner, deputy director of the Bureau of Competition.

The complaint also noted that other cooking oils are not competitive alternatives for canola and vegetable oils. The administrative trial is set to begin on Aug. 7.

Conagra brands said it was disappointed by and disagreed with the FTC's decision. The Chicago-based branded food company is working with J. M. Smucker to review all options.

J. M. Smucker agreed to acquire the Wesson brand on May 30, 2017. Under the terms of the deal, Conagra would continue to make Wesson products and provide certain other transition services for up to one year after completion of the transaction.