Poultry industry stakeholders have welcomed the news that 2 Sisters Food Group is taking over the Vion poultry processing business, though doubts remain about whether the deal will be subject to Competition Commission scrutiny, and what it means for Vion's farming, hatching and feed businesses.
NFU Scotland poultry group vice-chairman Robert Hay said the deal would give 2 Sisters a "huge chunk" of the Scottish poultrymeat business. "But with some supermarket customers announcing a substantially greater commitment to home-produced chicken, there is a clear opportunity for us to work with 2 Sisters to fill that increased demand jointly."
James Hook of PD Hook, which supplies day-old chicks to 2 Sisters growers, said it was good news that the uncertainty surrounding Vion was over. "I've experienced three occasions when this business has been up for sale and on each occasion it has led to uncertainty. And being up for sale has made them weak sellers, which is bad news for everyone.
"We are all breathing a sigh of relief that a large, credible business is taking them over. 2 Sisters is very good at selling stuff and, now following Tesco's announcement that they are going over to 100% British, there is a lot of chicken to sell. It secures their supply base and means that we are not going to have surpluses kicking around."
There is still the possibility that the Competition Commission will want to investigate the acquisition. With 2 Sisters already taking about 4.2m chicks a week and Vion another 3m, the combined production would amount to about 38% of UK poultry production.
But 2 Sisters Food Group director Philip Wilkinson was relaxed about the prospect. "I don't know if it will be referred, but why would anyone - apart possibly from competitors - want to oppose it?" he told Poultry World.
"Coming at a time when food miles and food security are high up the agenda, we've now got a British company taking ownership of a company that was under foreign ownership.
"We'll have British poultry producers growing for a British processor that is run by an entrepreneur who is committed to the UK food industry. His track record is undeniable."
The acquisition has also been weclomed by Tesco chief executive Philip Clarke: "Only last week I talked about bringing our food closer to home," he said. "2 Sisters acquiring Vion's UK sites helps keep meat production in the UK at a critical time and safeguards thousands of jobs, which is great for retailers and the UK economy."
It is understood that the planned acquisition only relates to Vion's poultry processing outfits - two in Scotland, two in Wales and three in England. Vion also owns seven hatcheries, four feed mills and over 180 owned broiler units, accounting for about 60% of its production.
A spokesman said that "agreement has been reached in principle to secure the future of these businesses, but the buyer has not been disclosed yet".
It is expected that contracted growers will sign over to 2 Sisters, which needs their birds to help fill its new Sainsbury's order, business it won from Vion last year.
More on this topic
2 Sisters snaps up Vion businesses
Sainsbury's drops Vion as poultry supplier
Got a view on the 2 Sisters takeover? Share it on Disqus below
Philip Clarke on G+