The anticipated acquisition of a Norfolk ForFarmers feed mill by poultry giant 2Agriculture could lead to local farmers paying higher prices.
This is according to the Competitions and Markets Authority (CMA), which had launched an in-depth 'phase one' investigation into the acquisition.
This found that Boparan's - which owns 2Agriculture - proposed purchase of ForFarmers’ Burston site could lead to a 'substantial lessening of competition' in the supply of poultry feed to East Anglia farmers.
The CMA also found that as a result of the transaction, Boparan would have the 'ability and incentive to harm rival poultry meat producers'.
This could lead to higher poultry feed costs for poultry farmers and processors which could be ultimately passed to retailers and consumers.
Netherlands-based ForFarmers and Boparan, through 2Agriculture, both manufacture and supply chicken and other types of poultry feed in the UK.?
The CMA found that the deal could lead to reduced competition in the local area around Burston – one of the two feed mill sites Boparan is seeking to purchase from ForFarmers.
The watchdog said it was 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, Somerset.
Joel Bamford, of 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 two' investigation."
