Plans by UK meat heavyweight Anglo Beef Processors (ABP) to buy assets from peer Scotbeef have been called in by the country’s competition watchdog.
The Competition and Markets Authority (CMA) has issued an initial enforcement order, expressing concerns that Scotland’s Scotbeef could be integrated into the ABP business, thus limiting competition in the industry.
The proposed transaction, announced in June, would see Scotbeef selling two sites in Scotland to ABP Food Group.
The deal centres on a meat-packing facility in Queenslie, Glasgow, and an abattoir further north at Bridge of Allan.
Scotbeef supplies beef and lamb cuts and ready-to-eat products to retailers in the UK and overseas, including Marks & Spencer and Lidl.
At the time the deal was announced, Scotbeef CEO Robbie Galloway said: “This sale is the right move for our staff and producer suppliers and also for Scottish agriculture as it secures the ongoing viability of these slaughtering and packing facilities in Scotland.”
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Scotbeef said it would continue to operate its UK sites in Inverurie, East Kilbride, Annan, Heysham and Wolverhampton.
ABP group CEO Frank Stephenson said: “It will be very much business as usual with a commitment to building on Scotbeef’s well-established tradition and reputation for high-quality Scottish red meat products.”
But the CMA is concerned that the businesses will not be run separately.
In a statement, the CMA said it has “reasonable grounds for suspecting that it is, or may be the case, that arrangements are in progress or in contemplation which, if carried into effect, will result in Anglo Beef Processors UK and Scotbeef’s business carrying out the slaughter, processing, packing, storage and sale of cattle and lamb products at Longleys Farm, Bridge of Allan, Stirlingshire and Penston Road, Queenslie, Glasgow, [and] the target business ceasing to be distinct”.
In attempts to ensure the businesses remain separate, the CMA is demanding, amongst other things, that “all reasonable steps are taken to encourage all key staff to remain with the target business and the ABP business and no business secrets, know-how, commercially-sensitive information, intellectual property or any other information of a confidential or proprietary nature relating to either of the two businesses shall pass, directly or indirectly, from the target business to the ABP business”.
It added: “ABP, Anglo Beef Processors and ABP UK shall take all necessary steps to ensure that each of their subsidiaries complies with this order.”
The CMA has not yet issued a date for the launch of its inquiry. Just Food, meanwhile, has approached ABP and Scotbeef for comments on the regulator’s concerns.
ABP supplies fresh and frozen meat products to retailers and foodservice clients internationally. It employs more than 13,000 people across four divisions, with processing facilities in nine countries and a turnover of €5bn ($5.5bn).