Regulator says scampi merger could push up prices for pubs and restaurants

The Competition and Markets Authority (CMA) has found North Yorkshire-based Whitby Seafoods’ purchase of Kilhorne Bay Seafoods could result in higher prices and lower quality products.

Whitby Seafoods agreed to buy Northern Ireland-based Kilhorne Bay Seafoods on 2 May 2023 and notified the deal to the CMA which launched a merger review into the deal.

The CMA says Whitby Seafoods is currently the largest UK supplier of breaded scampi to foodservice customers (such as pubs, restaurants, and fish and chip shops), holding a market share close to 90%.

Kilhorne Bay Seafoods, while significantly smaller than Whitby Seafoods, is the second largest supplier.

An initial phase one investigation conducted by the CMA has found Whitby Seafoods already holds a very strong market position in the supply of breaded scampi to foodservice customers.

Following the deal, Whitby Seafoods would face even less competition from other scampi suppliers.

The CMA’s investigation also found Whitby Seafoods faces limited competition from potential market entrants and suppliers of other types of breaded seafood.

The CMA will now refer the deal for an in-depth phase two investigation unless Whitby and Kilhorne Bay offer remedies which fully resolve its concerns.

Colin Raftery, senior director of mergers at the CMA, said: “Scampi is a popular choice when eating out in the UK, with over 20 million servings sold to restaurant, café, and pub goers every year.

“These venues are already facing significant cost pressures, and it’s critical that we don’t allow a loss of competition to make things worse.

“Kilhorne Bay is a relatively small player, but Whitby Seafoods already faces only very limited competition when competing for foodservice customers – so the deal would leave customers facing the risk of higher prices and lower quality products.”