LONDON, ENGLAND — UK agricultural suppliers ForFarmers UK and 2Agriculture have abandoned their proposed joint venture, first announced in July 2022, following regulators’ ongoing concerns that the deal could result in a substantial lessening of competition within UK feed markets and rejection of the companies’ proposed remedies.
ForFarmers and 2Agriculture said in their Feb. 7 announcement that they have taken into consideration, among other things, the current impact on their respective businesses, the duration and costs involved and the impact the regulatory process would have on both employees and farmers. Major poultry feed supplier 2Agriculture is a subsidiary of Boparan, while ForFarmers is a Dutch-owned animal feed supplier.
“ForFarmers and 2Agriculture continue to believe that the joint venture would have made for a robust business, with improved expertise and presence across species, to successfully meet the changing demands from the entire value chain,” the companies said. “This included helping farmers realize the transition toward a more sustainable way of farming with enhanced returns. The proposed joint venture would have invested in driving improvements and optimizing services in the most efficient manner, with a focus on further improving production efficiency and feed quality to the benefit of both farmers and end consumers.”
The Competition and Markets Authority (CMA) of the United Kingdom launched phase one of its regulatory inquiry 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.
CMA announced on Dec. 21 that it would continue its investigation of the proposed joint venture and would refer the plan for an in-depth Phase 2 investigation unless the parties offered acceptable remedies to address the CMA’s competition concerns.
The CMA said the proposal 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.On Jan. 9, theCMA announcedthat the remedies offered by ForFarmers and 2Agriculture did not adequately address its concerns about the effect of the proposed joint venture on competition, which ultimately led to the companies’ decision to scrap their plans.