The CC has approved the acquisition of Julian Graves Limited by NBTY Europe, the owner of Holland and Barrett. In its final report, the CC confirmed its provisional findings that the merger will not reduce the level of competition in the retail market for nuts, seeds and dried fruits in the UK or any local market in the UK.

Although both Holland and Barrett and Julian Graves competed in the market for nuts, seeds and dried fruit, the relevant product market also included supermarkets and other health food shops providing a range of these products at comparable prices. Following a thorough analysis of the market, the CC concluded that there was sufficient competition within the market to constrain the merged entity and prevent it from profitably implementing price increases.

The CC also considered, but rejected, the application of the failing firm defence. The failing firm defence allows a merger, that would otherwise be blocked due to its harmful effect on competition, to proceed, provided certain conditions are met. Although Julian Graves was in severe financial difficulty, less anticompetitive alternatives to the merger were conceivable, such as the acquisition by a financial buyer and, therefore, this argument was not accepted.