The OFT has launched an investigation into Lion Capital’s purchase of Cumbrian Seafoods to determine whether the deal raises competition concerns in the UK seafood supply chain.

The private equity conglomerate, which owns Young’s Seafood, bought Cumbrian and its sister company Border Laird on 6 December. The OFT said it had begun the investigation on its own initiative after its mergers intelligence unit identified the deal as potentially problematic.

News of the regulator’s investigation has been welcomed by Young’s competitors. Young’s had gained a dominant position in the smoked salmon market as a result of the acquisition, and further boosted its standing in chilled.

“In terms of the control Young’s has in the business, it’s significant,” the source added.

“In chilled and smoked markets together, there isn’t even a duopoly.” A second source estimated Young’s now held a 40% to 50% share of the UK smoked salmon market. “I would think producers would be worried,” he added.

However, Young’s said it was confident the acquisition merited “unconditional clearance”, adding it had outlined to the OFT various reasons why the deal should not give rise to substantive competition concerns. “The OFT has indicated that as long as there is evidential support for these reasons, the transaction should not present an issue,” a spokesman said.

The OFT requested comment by last Thursday (26 January) and expects to make a decision by 6 March.

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