A H Marks deal ‘will damage competition’
THE COMPETITION Commission has provisionally concluded that a deal which saw family-owned Yorkshire chemicals firm A H Marks sold to Australian group Nufarm for £75m could adversely affect farmers and raise prices for customers.
Bradford-based A H Marks is the UK’s largest privately-owned chemical manufacturer and was founded in 1877.
The £65m-turnover company which employs 330 people was acquired by Nufarm, which is Australia’s biggest supplier of farm chemicals, in March.
The deal was referred to the Competition Commission by the Office of Fair Trading in September, however, after the OFT claimed the deal exposed customers to “near monopoly” prices and was one of a series of mergers not notified to the OFT.
Both firms supply customers with chemicals used to make herbicides, which in turn are used by farmers to protect against weeds.
Now the Competition Commission has said that the tie-up could damage competition in the market for the supply of two phenoxy acids, technically known as MCPA and MCPP-p in the UK, which are chemicals used to make herbicides, and “appropriate remedies” will be considered.
The body said the case related to phenoxy herbicides which are used as a low-cost method of broadleaf weed control in grasslands and cereals. Nufarm’s and AH Marks’s businesses overlap in the production of technical acid, manufacturing concentrates and formulated products, it said.
Peter Freeman, the Competition Commission’s inquiry group chairman on the case, said: “The main issue in producing manufacturing concentrates and formulated products in the UK appears to be access to technical acids approved for use in the UK.
“In relation to MCPA and MCPP-p, the key barrier to entry to this market is access to protected data. In the light of this, we think the merger gives Nufarm too much market power in relation to these two technical acids and the products formulated from them and consider it likely that Nufarm will take advantage of this position by raising prices to its customers.
“Although the merger’s effect in the UK is relatively small, the cumulative damage to farmers and consumers is potentially big enough for us to be concerned. We are now considering appropriate remedies, should they be necessary, to deal with our concerns.”
The Competition Commission is expected to publish its final report by February 12 and is inviting interested parties to comment on the provisional findings by December 31.
A H Marks has produced chemicals at its site in Wyke, Bradford, since 1877 when it began making dyes for the local textile industry.
