Cereal manufacturer Kellogg South Africa is opposed to the possible joint venture (JV) between its rivals Pioneer Foods and Futurelife Health Products, and will testify at a Competition Tribunal hearing on the matter on Tuesday.

A statement from the tribunal explained that Kellogg intended to ask the tribunal to block the proposed merger or that the issue be referred back to the Competition Commission for further analysis.

According to Kellogg, ProNutro – which is made by Pioneer Foods – and Futurelife are competing breakfast cereals so a merger between them would reduce their incentives to compete with each other and, thus, lead to the removal of Futurelife as an effective competitor.

Kellogg’s intervention in the merger hearing followed the commission’s recommendation that the tribunal approve the merger without conditions. In its assessment of the deal, the Competition Commission concluded that ProNutro and Futurelife operated in different markets and, therefore, did not compete with each other.

JSE-listed Pioneer Foods advised shareholders in April that it had agreed to acquire a 50% shareholding in Futurelife, for an undisclosed amount, to enter into the functional foods category.

Pioneer said at the time that the JV would enable both companies to combine their expertise in both the food and beverage and functional foods sectors to explore profitable categories outside of their respective traditional markets and unlock new product opportunities that may otherwise not have been accessible to either company.

“As a leading fast-moving consumer goods company, innovation is at the core of our business,” said Pioneer Foods CEO Phil Roux, adding that the JV provided Pioneer Foods with the opportunity to shape a winning-brand portfolio through the fast-tracking of product innovations and the development of new product categories.

Futurelife founder and CEO Paul Saad, who would lead and manage the JV, noted that the deal was set to be a win for the South African consumer.

“Combining Pioneer Foods’ scale and experience in the food and beverage market together with our functional food expertise to create the first smart-food-formulated range of products will result in exciting new health choices.”

The hearing into the merger was initially set for Monday but had been postponed owing to additional information being filed. The hearing would now start at 9.30 on Tuesday and run till Wednesday.

Roux and Saad were among the witnesses set to testify in the matter.