LONDON, ENGLAND — The Competition and Markets Authority (CMA) of the United Kingdom announced this week that it will continue its investigation of the proposed joint venture between UK agricultural suppliers ForFarmers UK and 2Agriculture.

Phase one of the inquiry was launched in October 2022 and established the companies were planning on combining both of their animal feed milling operations. The two businesses combined operate 19 mills producing poultry and livestock feed in the UK.

Major poultry feed supplier 2Agriculture is a subsidiary of Boparan, while ForFarmers is a Dutch-owned animal feed supplier.

The CMA said the merger, announced by ForFarmers in July 2022, could result in a substantial lessening of competition within UK markets, based on current information available. The CMA found that the deal raises competition concerns in four local areas across East Anglia, north-western England and North Wales “where it could lead to higher prices for poultry feed, lower quality feed or worse quality of service.”

The CMA said it also was concerned that the joint venture could unfairly favor Boparan’s chicken farming and processing businesses, resulting in less choice for smaller chicken farmers and processors, who might rely on ForFarmers and Boparan for their chicken feed.

“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,” said Sorcha O’Carroll, senior director of mergers at the CMA. 

ForFarmers and 2Agriculture recently announced that they offered corrective measures in response to the announcement by the CMA on Dec. 21 that the planned joint venture would be referred to an extensive Phase 2 review unless the parties offered acceptable remedies to address the CMA’s concerns.

The CMA said this week that it believes the remedies offered do not adequately address concerns about the effect of the proposed joint venture on competition.

ForFarmers UK and 2Agriculture said they are considering their next steps.

The second phase of the inquiry began Jan. 9 and must be completed by June 25.