The United Kingdom’s Competition and Markets Authority (CMA) has found that British food manufacturer Boparan’s proposed purchase of a ForFarmers feed mill in Burston, England, could lead to competition concerns.
In a report released earlier this week, the CMA said the proposed merger, which also includes Boparan acquiring a ForFarmers feed mill in Radstock, England, “gives rise to a realistic prospect of substantial lessening of competition in the supply meat poultry feed to third-party customers in a number of local areas … and could lead to a foreclosure of poultry meat producers in the same local areas.”
The poultry feed manufacturing companies have five working days to respond to phase 1 of the CMA investigation. If they fail to address the CMA’s concerns, the UK regulator said it will launch phase 2 of its investigation.
The CMA noted in its report that it did not find competition concerns related to the acquisition of the mill in Radstock.
Several years ago, the companies had discussed combining their feed operations, which includes 19 mills, in a joint venture but the plan was dropped in 2023 following a CMA investigation.
Netherlands-based ForFarmers, one of Europe’s largest feed producers, has been in transaction mode in the past several years, merging with companies in Germany and Poland while selling its business in Belgium.
Competition Concerns
The CMA’s Phase 1 investigation found that the deal could lead to reduced competition in the local area around Burston – one of the two feed mill sites Boparan is seeking to purchase from ForFarmers.
Boparan's Potential to Harm Rivals
Boparan would have the ability and incentive to harm rival poultry meat producers, leading to higher poultry feed costs for chicken farmers and processors which could be ultimately passed to retailers and consumers.
Both ForFarmers and Boparan (owner of Birmingham-based 2 Sisters Food Group) manufacture and supply chicken and other types of poultry feed in the UK.
A History of Concerns
The firms were planning to combine their 19 animal feed milling operations in a joint venture, but the proposed merger was abandoned in February 2023, following another investigation by the CMA.
ForFarmers and Boparan have five working days to submit proposals to address the CMA’s concerns. If suitable proposals are not submitted, the CMA will progress to an in-depth Phase 2 investigation.
Joel Bamford, executive director of mergers at the CMA said: “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.
“It’s now up to the companies to offer solutions to address our concerns and avoid the deal moving to a full Phase 2 investigation.”
Could This Impact Consumers?
If the deal is allowed to go through, it could exacerbate this problem, and make it even harder for people to afford the food they need.
What's Next?
The CMA will now wait to see if ForFarmers and Boparan can come up with proposals that address its concerns. If they cannot, the CMA will move forward with a full Phase 2 investigation, which could take several months to complete.
More Than Just a Feed Deal
The CMA's decision to investigate this deal highlights the importance of competition in the UK food industry. It also shows that the CMA is willing to take action to protect consumers from the effects of anti-competitive practices.
The outcome of this investigation will have a significant impact on the poultry industry in the UK, and could set a precedent for future mergers and acquisitions in the sector.
This is a story that is still developing, and we will continue to follow it closely.
