A planned joint venture involving a company linked to UK chicken heavyweight 2 Sisters Food Group has raised concerns with the country’s competition watchdog.
The Competition and Markets Authority (CMA) has said a deal to merge the businesses of Boparan Private Office-owned 2Agriculture and Dutch animal feed maker ForFarmers’ UK arm, ForFarmers UK, “could unfairly favour Boparan’s chicken farming and processing businesses, resulting in less choice for smaller chicken farmers and processors, who might rely on ForFarmers and Boparan for their chicken feed”.
The CMA’s Phase 1 investigation into the planned deal raised competition concerns in two English areas – East Anglia and the north-west, and in North Wales. It warned these areas could see higher prices for poultry feed, lower quality feed, or worse, quality of service.
Sorcha O’Carroll, senior director of mergers at the CMA, said: “Feed is the biggest expense faced by farmers when rearing chicken, the UK’s favourite meat.
“With food prices already increasing and the wider cost-of-living crisis, it is vital that we don’t allow a reduction in competition between poultry feed suppliers, which could make this situation worse – both for farmers and shoppers at the check-out.”
ForFarmers UK and 2Agriculture agreed to merge their animal feed milling operations into a joint venture in July. Between them, the firms operate 19 mills across the UK.
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The CMA said that while both businesses currently compete for customers within the local areas it is concerned about, it is worried the combined business would not face sufficient competition after the merger.
It said it had received a number of complaints from customers and other market participants in relation to the impact this joint venture could have on choice of feed suppliers and poultry feed prices.
ForFarmers and Boparan now have five working days to submit proposals to address the CMA’s concerns. The CMA said if suitable proposals are not submitted, it will progress to an in-depth Phase 2 investigation.
Holding company Boparan Private Office is Ranjit Singh Boparan’s investment vehicle. He is the founder and owner of 2 Sisters, the UK’s largest poultry processor.
Another of Boparan Private Office’s recent deals, the acquisition of local peer Banham Poultry, also came under investigation by the CMA before it was cleared to proceed.
Just Food asked Boparan/2 Sisters for a response to the CMA’s concerns over the ForFarmers deal.
It replied: “ForFarmers UK and 2Agriculture are considering their next steps.”