The UK's competition watchdog has provisionally found that consumer goods maker Reckitt Benckiser's anticipated acquisition of the K-Y brand could lead to higher prices for personal lubricants.
Reckitt, which makes Durex condoms and already sells lubricant under the Durex brand, agreed to buy the K-Y brand of lubricants from Johnson & Johnson subsidiary McNeil-PPC for an undisclosed sum last March.
The Competition and Markets Authority (CMA), in a 22 May statement, said it provisionally believes the merger could lead to a "substantial reduction in competition, possibly through higher prices..."
The CMA commented: "K-Y and Durex hold almost three quarters of the market share in supermarkets and national pharmacies, where the majority of customers buy these products.
"Whilst customers can choose from a wide range of products and suppliers in specialist shops or when buying online, there is little evidence that these other outlets will act as a brake on any price rises in national chains, and smaller suppliers have historically had little success getting access to the shelves in these larger shops."
Inquiry chairman Phil Evans said: "Consumers and retailers differentiate between these 2 products to some extent. However, on balance, there seems to be enough of an overlap in the market for personal lubricants for there to be a realistic prospect of consumers facing less competition and possibly higher prices if the 2 biggest brands come under single ownership.
"We are now inviting responses to these provisional findings and will continue to assess all the evidence before we make our final decision."