The UK meat heavyweight, Anglo Beef Processors (ABP), faces a regulatory hurdle as plans to acquire assets from rival Scotbeef have been called in by the country’s competition watchdog.
The Competition and Markets Authority (CMA) has raised concerns that the integration of Scotbeef into ABP’s business could lead to limited competition in the industry. In response, the CMA has issued an initial enforcement order.
This proposed transaction, announced in June, entails the sale of two sites in Scotland by Scotbeef to ABP Food Group. The sites include a meat-packing facility in Queenslie, Glasgow, and an abattoir in Bridge of Allan.
Scotbeef, a supplier of beef and lamb cuts as well as ready-to-eat products to UK and overseas retailers like Marks & Spencer and Lidl, intends to continue operating its other UK sites in Inverurie, East Kilbride, Annan, Heysham, and Wolverhampton.
ABP CEO Frank Stephenson expressed optimism about the deal, stating, “It will be very much business as usual with a commitment to building on Scotbeef’s well-established tradition and reputation for high-quality Scottish red meat products.”
However, the CMA is apprehensive that the businesses will not be operated separately. In a statement, the CMA noted that there are “reasonable grounds for suspecting that…arrangements are in progress or in contemplation” that would result in both businesses merging their operations at specific locations and eliminating the distinctiveness of the target business.
As a means to ensure the businesses remain separate, the CMA has outlined various requirements. These include efforts to retain key staff within the target business, preventing the transfer of sensitive information between the two entities, and ensuring compliance with the order across all subsidiaries.
The launch date for the CMA’s inquiry has not yet been announced. We have reached out to ABP and Scotbeef for their comments on the regulator’s concerns.
With a turnover of €5bn ($5.5bn) and operating in nine countries, ABP supplies fresh and frozen meat products globally and employs over 13,000 people across its four divisions.
