The acquisition of two beef processing sites in Scotland by ABP Food Group is under investigation by the UK’s competition watchdog.
The Competition and Markets Authority (CMA) is investigating the acquisition of an abattoir in the town of Bridge of Allen, and a meat packing plant in Queenslie in Glasgow.
Both plants belong to Scottish-based processor Scotbeef.
The CMA issued an enforcement order to Anglo Beef Processors (ABP) UK on Saturday (July 29), indicating that it had decided to investigate the transaction on the basis that the business of ABP UK and Scotbeef will cease to be distinct.
The CMA has not indicated a date by which it will reach a decision.
The enforcement order prevents ABP from taking any action, during the course of the investigation which would lead to the integration of Scotbeef with ABP; transfer ownership or control of Scotbeef or its subsidiaries; or impair the ability of ABP and Scotbeef to compete independently in any of the markets affected by the transaction.
However, this does not apply to any actions taken by ABP prior to the date of the enforcement order.
As well as outlining what ABP cannot do, the enforcement order also compels ABP to take certain actions and ensure certain condition are maintained.
These include, but are not limited to:
- Scotbeef is carried on separately from ABP, with separate brand identity maintained;
- Both businesses are maintained as a going concern;
- No significant changes are made in the organisational structure of either business;
- Quality of goods provided by both businesses within the UK are maintained;
- Assets of either business are maintained and not disposed of;
- No integration of the information technology (IT) between both businesses and Scotbeef’s software platforms will remain unchanged;
- Lists of suppliers and customers of both businesses will remain separate, and Scotbeef will continue to carry out its own negotiations with existing or potential suppliers or customers;
- No changes are made to key staff of either business and no staff are transferred between the two;
- Reasonable steps must be taken to ensure all key staff remain with both businesses;
- No information of a confidential or proprietary nature relating to either business shall pass between the two, except as is necessary in the ordinary course of business (such as regulatory or accounting obligations), provided that any records or copies of such information be returned to the business to which they relate and are destroyed in the event that the transaction is prohibited.
Again, these obligations in the enforcement order only apply from the date on which the order was issued.
ABP is required to provide information to the CMA that the latter requires for the purposes of monitoring compliance with the enforcement order.
ABP announces acquisition
ABP announced the acquisition of the Bridge of Allan abattoir and Queenslie meat packing plant on June 15.
It is intended that the two facilities will become part of ABP’s UK meat division, which also includes an existing processing facility in Perth, Scotland.
The sale was expected to be completed by the end of July.
Frank Stephenson, group chief executive of ABP, had said: “We look forward to working with the team in Scotbeef to ensure a smooth and seamless transition for farmer suppliers, colleagues and customers at the Queenslie and Bridge of Allan plants.”