Planned scampi merger is off the menu

A North Yorkshire-based scampi supplier has scrapped merger plans, after a regulator warned it could lead to higher prices for customers.

Whitby Seafoods Ltd confirmed it would not be going ahead with its proposed acquisition of Northern Ireland-based Kilhorne Bay Seafoods.

As reported last week, the Competition and Markets Authority (CMA) had referred the deal for an in-depth “phase-two investigation”, citing price and quality concerns.

The business rejected these suggestions, but said the resources needed to engage in the investigation process were “out of proportion” to any benefits from the deal.

Whitby Seafoods is the largest UK supplier of breaded scampi to catering clients with a market share of 90%, according to the CMA.

The CMA said it feared its merger with Kilhorne Bay Seafoods would mean less competition from other scampi suppliers, resulting in higher prices and lower quality for customers.

The deal was referred for a phase-two investigation, which would have given both businesses an opportunity to address the CMA’s concerns. However, Whitby Seafoods has since informed the regulator that it was abandoning the planned merger.

A spokesman for the business told the BBC: “Sadly the resources required to engage in a CMA phase two investigation are out of all proportion to any potential benefit from the deal, and we have therefore withdrawn our offer for Kilhorne and will not be proceeding with the acquisition.”