The planned ForFarmers and 2Agriculture merger could result in higher feed costs, according to the Competition and Markets Authority (CMA), which has launched a phase 2 in-depth investigation into the proposal.

The feed companies, ForFarmers and Edinburgh-based 2Agriculture, which is part of Boparan's 2 Sisters Food Group, are in the process of combining their animal feed milling operations in a joint venture which would see collaboration over their combined 18 mills across the UK. Both manufacture and supply poultry feed.

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In CMA’s Phase 1 investigation, it highlighted concern over a lack of competition in the feed market for farmers in East Anglia, the North-west of England, and North Wales. The report stated this 'could lead to higher prices for poultry feed, lower quality feed or worse quality of service'.

The regulator added: "While both businesses currently compete for customers within each of these local areas, the CMA is concerned that the combined business would not face sufficient competition after the merger. The CMA is also concerned that the joint venture could unfairly favour 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."

This was echoed by a number of complaints by farmers and stakeholders over the joint merger. The focus on the worry is around the four mills at Burston, in Norfolk; Bury, in Suffolk; Llay, in North Wales; and Preston, in North-west England. The combined businesses would account for 50 to 60% of the supply of meat poultry feed to third parties in three of these local areas (Burston, Bury and Llay) and 40 to 50% in the Preston area.

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The text of this decision following the investigation will be published in due course, the watchdog added, with a statutory deadline set for 25 June 2023.