Food and Beverage Business

CMA investigation leads to cancellation of Whitby Seafoods acquisition

CMA investigation leads to cancellation of Whitby Seafoods acquisition acquisition, CMA investigation, dropped, Whitby Seafoods Food and Beverage Business

In light of a Competition and Markets Authority (CMA) investigation, UK supplier Whitby Seafoods has decided against acquiring Kilhorne Bay Seafoods.

On May 2, 2023, Whitby Seafoods initially agreed to purchase Kilhorne Bay Seafoods and promptly informed the CMA of the transaction. This notification prompted the CMA to commence a merger review on August 8, 2023.

Following a Phase One investigation conducted by the CMA, it was revealed that Whitby Seafoods already possesses a dominant market position in the supply of breaded scampi to foodservice customers. The investigation also identified limited competition from potential market entrants and other suppliers offering similar breaded seafood products.

Currently, Whitby Seafoods Limited holds the largest share of the UK market for breaded scampi supplied to foodservice customers, accounting for nearly 90% of market share. Although Kilhorne Bay Seafoods is a considerably smaller supplier, it holds the second-largest position in the market.

Colin Raftery, senior director of mergers at the CMA, commented, “Scampi represents a popular option for dining out in the UK, with over 20 million servings consumed by restaurant, café, and pub customers annually.

“These establishments already face significant cost pressures, and it is crucial that we prevent a loss of competition from exacerbating the situation.

“While Kilhorne Bay may be a relatively minor player, Whitby Seafoods already faces minimal competition when vying for foodservice customers. As a result, this deal would expose customers to the potential risks of higher prices and lower quality products.”

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