THE Competition and Markets Authority (CMA) has said it will further investigate the proposed joint venture between ForFarmers and 2 Agriculture.
Both ForFarmers UK and 2 Agriculture are major manufacturers of poultry feed, with the latter ultimately owned by the Boparan Private Office, which also owns 2 Sisters Food Group.
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Between them, the firms operate 19 mills across the UK.
Following a phase 1 investigation, the CMA said the deal raised competition concerns in four parts of the UK: East Anglia, north-western England, and North Wales, which could lead to higher prices for poultry feed.
It added that the joint venture could “unfairly favour Boparan’s chicken farming and processing businesses, resulting in less choice for smaller chicken farmers and processors”.
During its Phase 1 investigation, the CMA received several complaints from customers and other market participants concerning the impact this joint venture could have on the choice of feed suppliers and poultry feed prices.
Feed is biggest expense
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.”
The CMA said ForFarmers and Boparan have until 30 December to submit proposals to address concerns.
It added that if suitable proposals are not submitted, it will progress to an in-depth Phase 2 investigation.
A joint statement from the two companies said: “ForFarmers UK and 2Agriculture are considering their next steps.”