CMA's Phase 1 investigation has found that Boparan's deal to buy ForFarmers' Burston feed mill could lead to farmers in East Anglia paying higher prices to feed their poultry.
A Phase 1 investigation by the Competition and Markets Authority (CMA) has found that Boparan's proposed purchase of ForFarmers' Burston feed mill site could lead to a substantial lessening of competition (SLC) in the supply of poultry feed to independent customers (such as farmers) in East Anglia.
The CMA has also found that as a result of the transaction, Boparan would have the ability and incentive to harm rival poultry meat producers, leading to higher poultry feed costs for chicken farmers and processors which could be ultimately passed to retailers and consumers.
ForFarmers and Boparan (through 2Agriculture) both manufacture and supply chicken and other types of poultry feed in the UK.
The CMA's investigation found that the deal could lead to reduced competition in the local area around Burston - 1 of the 2 feed mill sites Boparan is seeking to purchase from ForFarmers. The CMA is concerned that the deal could lead to less capacity for feed being supplied to independent farmers and processors resulting in higher costs and a reduction in 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.
ForFarmers and Boparan have 5 working days to submit proposals to address the CMA's concerns. If suitable proposals are not submitted, the CMA will progress to an in-depth Phase 2 investigation.
Joel Bamford, Executive Director of Mergers at the CMA, said:
We're concerned that this deal could worsen competition between poultry feed suppliers in East Anglia - leading to higher costs for farmers which could then be passed down to shoppers.
It's now up to the companies to offer solutions to address our concerns and avoid the deal moving to a full Phase 2 investigation.
