ADM gets approval for Schokinag acquisition

By staff reporter

- Last updated on GMT

Related tags Chocolate Cocoa butter Chocolate liquor Adm

Archer Daniel Midland has received clearance from the European Commission to acquire German industrial chocolate maker Schokinag.

The American agri-foods giant announced its plan to buy Schokinag-Schokolade-Industrie Herrmann GmbH & Co. KG in January, as part of a strategy to move closer to its customers on this side of the Atlantic.

“After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it,”​ said a statement from the European law-maker.

While ADM’s activities revolve around production, processing and distribution of agricultural commodities and products such as oilseed, corn and cocoa, Schokolag manufactures and distributes semi-finished cocoa and chocolate products.

The competition enquiry looked at the effects the merger would have on procurement of cocoa beans, as well as semi-finished cocoa products like cocoa mass, cocoa butter and cocoa powder. It found that the two entities were not close competitors in any of their spheres of activity – and in any case, a number of other competitors are active in the markets they serve.

Benoit Villers, director of chocolate for ADM International, said that it is already capable of delivering to European customers, as in 2006 ADM acquired the assets of the UK, business-to-business chocolate manufacturer Classic Couverture Ltd.

But the supply chain from the UK can be “quite expensive”​ and this latest acquisition would make it easier for the company to grow in the region. Villers added that ADM would also be “much better equipped” to offer different types of products to customers as taste preferences may differ from country to country.

Schokinag manufactures chocolate and other cocoa products in it headquarters in Mannheim, Germany, and in Manage, Belgium. It has sales offices in Ludlow, UK and in California, USA.

Chocolate confidence

The acquisition is taken as an indication of ADM’s confidence that the European chocolate market will be resilient, despite strong evidence that this sector is being hit hard by the current economic turmoil.

Villers told in January: “I’m convinced that chocolate is a crisis-proof product because it is the most affordable product to indulge ourselves and our friends.

“Today we can see that the market is maybe flat but we don’t think it will be the case over the next coming years.

“Chocolate has always grown one, two or three per cent. After this crisis, we don’t see why it would be different.”

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