USA – The JM Smucker Company has agreed to terminate the definitive agreement for the Company to acquire the Wesson oil brand from Conagra, an agreement that was previously announced on May 30, 2017.

According to the company, the U.S. Federal Trade Commission (FTC) announced that it filed an administrative complaint challenging the proposed transaction, on March 5, 2018.

“While we disagree with the FTC’s conclusion, we have mutually determined with Conagra that it is not in the best interest of either party to expend the anticipated significant additional time and resources to challenge the FTC’s administrative complaint,” said Mark Smucker, Chief Executive Officer.

“We believe the FTC underestimated the significant role that private label brands play in the oils category, which account for approximately 50% of all cooking oil sales and hold significantly higher market share at some retailers.

This transaction was expected to provide significant cost synergies to ensure that branded oil products would remain competitive in the market.

We continue to be committed to delivering value to our consumers and customers with our Crisco brand and oils business.”

According to Reuters, the FTC stated that Smucker owns the Crisco brand, and if it acquired the Wesson brand, it would have controlled at least 70% of the market for branded canola and vegetable oils sold to grocery stores and other retailers.

Ian Conner, deputy director of the FTC’s bureau of competition, said the announcement “is good news for consumers across the United States because they will continue to reap the benefits of vigorous competition in the market for branded canola and vegetable oils.”

JM Smucker had said it expected the deal to add about US$230 million to its annual net sales.

The FTC said retailers and ultimately consumers “would likely face higher prices for branded canola and vegetable cooking oil” if the deal was approved.

It added that the deal was struck after attempted price increases by each brand over the past two years that were limited by intense competition from the two rivals.

Lastly, it also added that Smucker’s internal documents acknowledged that eliminating price competition between Crisco and Wesson was a central part of its rationale for the acquisition.