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Anticipated acquisition by Cranswick Country Foods plc of the pork processing business of Bowes of Norfolk

Affected market: Purchase of live pigs for slaughter, supply of fresh pork for consumption and processing

No. ME/4090/09

Please note that the full text of the decision can be downloaded by using the link on the right. What follows are extracts regarding the parties, the transaction, jurisdiction, third party views, assessment and decision.

The OFT's decision on reference under section 33(1) given on 9 June 2009. Full text of decision published 22 June 2009

Please note that the square brackets indicate figures or text which have been deleted or replaced in ranges at the request of the parties or third parties for reasons of commercial confidentiality.


Cranswick 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 (CCF) 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. Bowes produces in the region of [  ] pigs a week on its own farms for use in its own primary pork processing business, which supplies fresh pork to the food industry and to large food retailers (primarily [  ]). It purchases in the region of a further [  ] pigs a week, also for primary processing. As with Cranswick, any prime meat not used in its own operations is sold to secondary pork processors for the production of sausages, etc. Bowes' total turnover in the financial year to 29 March 2008 was [  ].


On 3 April 2009, Cranswick plc, through CCF, entered into sale and purchase agreements by which Cranswick agreed to purchase the whole of the issued share capital of Bowes.

Cranswick 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 OFT accepted the parties' submission on 7 April 2009 and the administrative deadline is 9 June 2009.


The OFT believes that arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a relevant merger situation. As a result of this transaction, Cranswick and the Bowes pork processing business will cease to be distinct.

The UK turnover of the business being acquired in the year to 29 March 2008, the last year for which audited accounts are available, was £[  ], which exceeds the £70 million UK turnover threshold set out in section 23(1)(b) of the Enterprise Act 2002.


In general, third parties were positive towards the merger, stating that it would create a better competitor to Tulip and Vion, or they did not believe it would have a negative impact on them.

Concerns were raised in respect of the merger by [  ], [  ] and [  ]. Generally, third parties were concerned that the merger would reduce the suppliers of British pork and could potentially result in total of partial foreclosure of competitors in the downstream market.

In addition, [  ] argued that the merged entity may be able manipulate the DAPP in future.


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. The geographic frame of reference for the former is Great Britain, while the OFT has assessed the latter two markets, on a conservative basis, on a national market assumption.

In the purchase of live pigs for slaughter, the merger will increase the parties' market share to [10-20] per cent with an increment of [0-10] per cent. In the supply of fresh pork for consumption, the merger will increase the parties' market share by volume to [10-20] per cent with an increment of [0-10] per cent. In the supply of pig meat for further processing the merger will increase the market share of the parties to [0-10] per cent with the increment of [0-10] per cent. The levels of market shares and the small increments are not normally at levels that would cause the OFT to be concerned. In addition, there remain two strong competitors in fresh pork supply following the merger and there are also a number of additional smaller competitors that are active in the supply of fresh pork.

There have been some concerns in relation to the parties' ability and incentive to foreclose competitors in the downstream market. As discussed above, the parties' ability to foreclose in this market would be limited by its low upstream market power which would not enable it to partially or totally foreclose competitors. In addition, given that [a significant proportion] of Cranswick's sales are currently to its downstream competitors it is not likely that it will have the incentive to foreclose a downstream competitor, especially given the difficulties in expanding its capacity.

Consequently, the OFT does not believe that it is or may be the case that the merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.


This merger will therefore not be referred to the Competition Commission under section 33(1) of the Act.

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