Details of 2 Sisters Vion deal revealed
The finer details surrounding 2 Sisters’ acquisition of Vion’s UK poultry operations have been released by the Office of Fair Trading (OFT), which ruled that the merger did not need to be referred to the Competition Commission.
The inquiry was triggered by the turnover of the two chicken integrators (around £70m), which meant that the OFT needed to examine the impact on competition within the UK poultrymeat industry, as well as any potential influence on prices the combined businesses could have.
The report details that 2 Sisters Food Group’s holding company, Boparan Holdings Limited, and a related but unnamed business bought Vion UK’s poultry estate, causing the two entities to cease being “distinct”, and puts Vion, 2 Sisters and Moy Park as the top three firms in poultrymeat.
The OFT estimated that the total market share of the two companies is 30-40% – “in excess” of 40-50% for primary fresh chicken. It also noted that the share may be higher still for just UK-reared poultry.
The report said that third parties had “raised concerns with the OFT that the merger would reduce their choice of large-scale effective competitiors from three to two”.
But the OFT pointed to the fact that supermarkets sourced chicken via “large contracts” from a number of different firms, which it said maintained competition from smaller suppliers. The full report can be accessed here.