The Office of Fair Trading (the OFT) has not referred to the Competition Commission the anticipated acquisition by Cranswick Country Foods plc of the pork processing business of Bowes of Norfolk. Cranswick plc supplies a range of fresh pork, gourmet sausages, premium cooked meats, traditional dry cured bacon, charcuterie and sandwiches to its customers from a number of production facilities in the UK. Cranswick Country Foods plc is responsible for the fresh and processed pork operations of the Cranswick group. Bowes is a third generation family-owned business based in Watton, Norfolk.
On 3 April 2009, Cranswick plc, through Cranswick Country Foods plc, entered into sale and purchase agreements by which Cranswick plc agreed to purchase the whole of the issued share capital of Bowes. Cranswick plc will only be acquiring Bowes' pork processing division and, so, immediately prior to completion of the acquisition the arable farming and pig rearing divisions will be sold off to companies owned by certain Bowes family members.
The parties overlap in the supply of live pigs for slaughter, the supply of fresh pork for consumption and the supply of pig meat for further processing. There had been some concerns in relation to the parties' ability and incentive to foreclose competitors in the downstream market. It was found by the OFT, however , that the parties' ability to foreclose in this market would be limited by their low upstream market power which would not enable them to partially or totally foreclose competitors. In addition, given that a significant proportion of Cranswick plc's sales are currently to its downstream competitors it was found by the OFT that is not likely that it will have the incentive to foreclose a downstream competitor, especially given the difficulties in expanding its capacity.