Two poultry feed companies are set to be investigated after a competition watchdog warned a new deal between them could lead to price hikes for farmers and customers.
According to competition regulator the Competition and Markets Authority (CMA), an initial inquiry into the merger between ForFarmers UK and Boparan’s 2Agriculture group found concerns in East Anglia, north-western England and North Wales.
The CMA said the deal between both animal feed companies could “lessen competition” in those areas of the UK and could lead to higher prices for poultry feed or have an impact on supply, which could ultimately raise prices for consumers.
Subscribe to Grocery Gazette for free
Sign up here to get the latest grocery and food news each morning
ForFarmers and 2Agriculture, which is owned by Boparan, announced plans earlier in the year to combine their animal feed milling operations.
Both companies make and supply chicken and other types of poultry feed in the UK – which spans 19 mills across the UK.
Combined, the two businesses would account for between 50% and 60% of the supply of meat poultry feed to third parties in three local areas – Burston, Bury and Llay – and between 40% and 50% in Preston.
The CMA said it was also concerned the joint venture could unfairly favour Boparan’s chicken farming and processing businesses.
The result would see less choice for smaller chicken farmers and processors, who might rely on ForFarmers and Boparan for their chicken feed.
“Feed is the biggest expense faced by farmers when rearing chicken, the UK’s favourite meat,” senior director of mergers at the CMA, Sorcha O’Carroll said.
“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 checkout.”
The news comes as the UK is currently “sleepwalking” into a food supply crisis unless the government steps in to help farmers, the National Farmers Union (NFU) has warned.
