(Reuters) – British food maker Boparan Holdings’ proposed deal to buy Dutch agricultural feed company ForFarmers’ feed mill site in Burston could reduce competition in poultry supply in the area, the UK competition watchdog said on Wednesday.
The Competition and Markets Authority’s (CMA) initial probe found the deal would give Boparan the ability and incentive to harm rival poultry meat producers, leading to higher poultry feed costs for chicken farmers and processors in East Anglia.
WHY IT’S IMPORTANT?
The CMA was probing a proposed joint venture between the two companies in 2022 for competition concerns but dropped its investigation after the parties abandoned that plan.
Boparan — which also owns 2 Sisters Food Group, a supplier of ready-to-eat meals, frozen poultry to the likes of Aldi, Asda, M&S and Tesco — then went on to purchase ForFarmers’s feed mills in Burston and Radstock.
The CMA said it did not find competition concerns related to the acquisition of the mill site in Radstock.
CONTEXT
2Agriculture, the unit via which Boparan is buying the mills, supplies poultry across Scotland, East Anglia and North Wales.
Netherlands-based ForFarmers and 2Agriculture operate two mills each in East Anglia.
KEY QUOTES
“We’re concerned that this deal could worsen competition between poultry feed suppliers in East Anglia – leading to higher costs for farmers which could then be passed down to shoppers,” said Joel Bamford, the CMA’s executive director of mergers.
The CMA said the purchase of the Burston mill could lead to less capacity for feed supply to independent farmers, higher costs and reduced quality of services.
WHAT NEXT?
Boparan and ForFarmers have five working days to provide remedies, in the absence of which the regulator will launch a deeper phase 2 investigation.
(Reporting by Prerna Bedi in Bengaluru; Editing by Savio D’Souza)
