Ranjit Singh Boparan, who owns 2 Sisters Food Group, had agreed to the acquisition of the feed mill in Burston, Norfolk, via his feed manufacturing firm 2Agriculture.
However, a Phase 1 inquiry by the Competition and Markets Authority (CMA) has found that the proposed purchase could lead to a substantial lessening of competition in the supply of poultry feed to independent customers such as farmers across East Anglia.
With feed supply competition reduced, the CMA fears that higher costs and a reduction in the quality of services could follow.
Meanwhile, investigators found that as a result of the transaction, Boparan would have the “ability and incentive to harm rival poultry meat producers”.
This may cause higher poultry feed costs for chicken farmers and processors which might then be passed onto retailers and consumers.
In addition to the acquisition of the feed mill in Burston, Boparan agreed to purchase a separate site in Radstock. This deal was also investigative but the CMA did not find competition concerns.
CMA ‘concerned’ about impact of deal
ForFarmers and Boparan now have five working days to submit proposals that address the CMA’s concerns and if suitable proposals are not submitted, it will progress to an in-depth Phase 2 investigation.
“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,” said Joel Bamford, CMA executive director of mergers.
“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.”
In 2022, the CMA investigated a separate joint venture by ForFarmers and Boparan and found following a Phase 1 investigation that the merger gave rise to competition concerns in the local areas around four feed mills operated by the combined businesses.
Ultimately, the deal was abandoned in February 2023 during the Phase 2 investigation.