The proposed purchase of two feed mills in the United Kingdom (U.K.) by Boparan, owner of the U.K.’s largest poultry company, 2 Sisters Food Group, and of the U.K.’s largest feed supplier, 2Agricuture, could lead to a substantial lessening of competition in poultry feed supply to independent customers in the area of East Anglia, according to a Phase 1 investigation by the country’s Competition and Markets Authority (CMA).
The CMA, which initiated its review of the proposed purchase from feed company ForFarmers in September 2023, is concerned by the purchase of one of the mills, in Burston, in particular. It believes that seeing the site come under Boparan ownership could lead to a substantial lessening of poultry feed supply to customers in the region.
Should the transaction go ahead, it says, Boparan would have the ability and incentive to harm rival poultry meat producers, leading to higher poultry feed costs, which could be passed on to consumers. The deal could also lead to less capacity for feed being supplied to independent farmers and processors and a reduction in the quality of services.
The CMA did not find competition concerns in relation to the second feed mill site Boparan is planning to acquire in Radstock.
The two companies must now submit proposals to address the CMA’s concerns. If suitable proposals are not submitted, the CMA will progress to a more in-depth, independent, Phase 2 investigation.
Ongoing difficulties
In 2022, the CMA investigated a joint venture between ForFamers and Boparan. After a Phase 1 investigation, it found that the deal gave rise to competition concerns in the area around four of the feed mills operated by the combined business.
The companies offered proposals to address the CMA’s concerns at the time, but the CMA considered that these were unlikely to be sufficient in addressing its concerns and, as a result, the deal was referred for an in-depth Phase 2 investigation.
The deal was abandoned in early 2023 during the Phase 2 investigation.
