The Competition & Markets Authority has opened an investigation into the June acquisition by red meat giant ABP UK of two meat plants owned by rival supplier Scotbeef.
The CMA’s initial enforcement order references section 22 and 33 of the Enterprise Act 2002, which ask whether a merger could result in “a substantial lessening of competition” in a particular market.
The order, which commenced on 29 July, compels the two parties not to integrate the Scotbeef business into the ABP operation, to avoid the transfer of ownership or control of the business and to avoid the impairment of the Scotbeef business’ ability to “compete independently in any of the markets affected by the transaction”.
A deal for ABP to acquire Scotbeef’s Bridge of Allan abattoir in Stirling and its Queenslie meat packing plant in Glasgow was confirmed in mid-June, ending months of speculation into the future of the wider Scotbeef business – Scotland’s last major independent beef processor.
Family-owned Scotbeef will retain ownership of its Wolverhampton plant, plus its East Kilbride, Annan and Heysham facilities – which it is understood will predominantly service its own DTC e-commerce operation J W Galloway, independent and foodservice contracts, plus an existing M&S deal.
It lost an own label Aldi beef supply contract – serviced from Bridge of Allan and Queenslie – to ABP during the spring.
At the time of the deal’s announcement, ABP said its acquisition would be “seamless” as it transitioned the Scotbeef facilities into its UK meat division – which also includes an existing Scottish processing facility in Perth.
A spokesman for ABP this week said it would “await the outcome” of the CMA process before transitioning the two sites. Scotbeef declined to comment.
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