South Africa’s Premier FMCG expands confectionery portfolio with acquisition of Mister Sweet

SOUTH AFRICA – Premier FMCG, the manufacturer, distributer and marketer of branded and private label fast-moving consumer goods in Southern Africa, has acquired Mister Sweet, the sugar-based confectionery business of Lodestone Brands.

The business purchase is in line with Premier’s growth strategy into the candy business, as the acquisition of the well-known brands i.e., Mister Sweet, Candy Tops, Champion, Rascals, and Frutus, will expand its current Manhattan Sweets and Super C Sweets candy portfolio.

The consumer goods company, commenced operations at its newly built confectionery manufacturing factory in the first quarter of the year, marking its entry into the boiled candy market segment.

From researching concepts, sourcing and commissioning equipment, creating exciting packaging designs, and taking product to trade, the Confectionery Team at the company were able to take their new range of Manhattan Candies, Manhattan Pops and Super C Fruity C Candies to the market in March.

Premier’s sugar-based confectionery products include gums and jellies, chews, compressed tablets, marshmallows and hardboiled candy, while Mister Sweet’s portfolio includes gums and jellies, marshmallows, liquorice, sugar panned products such as speckled eggs, chocolate panned products, toffee, peanut brittle and nougat.

“The fit between the Mister Sweet and Premier FMCG portfolios will enable the combined entity to add value and grow the category in terms of innovation, brand leverage, and operational efficiencies.”

Kobus Gertenbach – Chief Executive Officer

Other than expansion of its product portfolio, the recent acquisition will also enable Premier FMCG to enter adjacent categories and unlock value through scale, synergies, and efficiencies.

The result will be increased participation in the sugar-based confectionery category with a revenue contribution of over R1 billion (US$74.18m) and a market share value increase from 7.7% to 13.8% on a 12-month basis.

“The fit between the Mister Sweet and Premier FMCG portfolios will enable the combined entity to add value and grow the category in terms of innovation, brand leverage, and operational efficiencies,” Kobus Gertenbach, Chief Executive Officer said.

Going forward, Premier FMCG will operate centres of excellence at its two Sugar-Based Confection manufacturing sites in Gauteng, resulting in efficiencies by aligning production capabilities and seeking opportunities for expansion through investment in its capabilities, brands, and people.

Tribunal approves Premier’s with conditions that reduce anticipated retrenchments

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The acquisition of Mister Sweet had received a nod from the Competition Tribunal since last month, on the basis that it is unlikely to substantially prevent or lessen competition in the national market for the manufacture and supply of sugar-based confectionary products.

However, on public interest grounds the Minister of Trade, Industry and Competition (the “Minister”) raised concerns over anticipated merger-related retrenchments.

Following engagements with the Minister, the merger parties agreed to conditions where a moratorium was placed on 19 non-executive positions initially earmarked for retrenchment for a period of 24 months after the merger implementation date – effectively reducing the number of anticipated retrenchments.

In terms of the conditions the total number of potential retrenchments is limited to six (6) employees.

The Tribunal approved the merger subject to the condition, that should vacancies become available due to resignation or natural attrition during the 24-month moratorium period, Premier will endeavour to fill the vacancies from the 19 non-executive employees who would otherwise be retrenched after the 24-month moratorium.

According to Research and Markets, South Africa’s confectionery industry comprising the chocolate market, valued at approximately R6.4 billion (US$474m) and sugar confectionery, was valued between R12.5 billion (US$927m) and R13.5 billion (US$1 billion) in 2019.

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