The UK competition watchdog has ordered ABP Food Group and Dovecote Park’s owner to keep their businesses separate while it examines the Irish meat group’s investment in the UK red-meats supplier.
In an initial enforcement order, the Competition and Markets Authority said it had “reasonable grounds for suspecting” ABP and Extra Detail, Dovecote Park’s parent, “have ceased to be distinct”.
Last month, ABP acquired a minority stake in Extra Detail by buying out Benoni, which held a minority stake in the Yorkshire beef processor Dovecote Park.
At the time, Dovecote Park confirmed ABP has “taken a seat on the board of directors of Extra Detail and its subsidiary companies”.
In a statement, the Waitrose supplier added: “Benoni, as a minority shareholder, will be supportive of the group’s strategic direction, whilst maintaining the policy of acknowledging the current board and management team‘s independent ability and authority to grow and develop the Dovecote Park business.”
The regulator is considering whether the deal has created a relevant merger situation and whether it has resulted, or could be expected to result, in a “substantial lessening of competition” in any UK market.
Under the CMA’s order, ABP, Extra Detail and any related entities must not take action that could lead to integration of the two businesses, transfer the ownership or control of the businesses, or impair their ability to compete independently.
The order also requires Dovecote Park’s business to be carried on separately from ABP, with its “separate sales or brand identity” maintained.
In addition, the watchdog said the two sides must keep customer and supplier lists separate and avoid joint negotiations.
They must also make no significant changes to their organisational structures or key staff and prevent commercially sensitive information from passing between the businesses, except in limited circumstances, the CMA said.
The watchdog added the companies must submit compliance statements from 1 October every two weeks. The CMA said it can seek injunctions or impose financial penalties for breaches of the order.
