Cartel watchdog strikes at British merger ForFarmers

ForFarmers announced in July that the British branch of the animal feed company will merge with 2Agriculture, a feed company in the UK that focuses exclusively on the poultry sector. However, the plans are encountering headwinds, as the UK regulator (CMA) has decided to launch a phase 2 investigation unless a settlement can be reached with other parties. 

The CMA thinks that the merger between the two parties may increase the cost price for British poultry farmers, according to the outcome of the first phase. In addition, poultry farmers could be limited in their choice of feed supplier. Complaints have been lodged with the CMA by poultry farmers and other British feed producers. With eighteen compound feed factories in the UK, the future merger company would become too dominant. 

The findings of the cartel watchdog are a setback for ForFarmers, where correct a lot of enthusiasm to taste about the proposed merger. The listed animal feed group is currently considering next steps, for which the company only has a few days. One option is for ForFarmers and 2Agriculture to make concessions to the competition. If there is no response, the second phase of the investigation will start. 

Wouter Job

Wouter Baan is Head of Meat & Dairy at BoerenbusinessAt DCA Market Intelligence, he focuses on dairy, pork, and meat markets. He also monitors (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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