Scampi merger could push up prices for UK pubs and restaurants

Whitby Seafoods’ acquisition of market competitor Kilhorne Bay Seafoods could result to higher prices and reduced product quality, the Competitions and Markets Authority (CMA) has warned.

Whitby Seafoods is the largest UK supplier of breaded scampi to foodservice customers, holding a market share close to 90%. While Kilhorne Bay Seafoods is significantly smaller than Whitby Seafoods it is the second largest supplier in the market.

The CMA launched a merger review into the deal in August and has said: “The loss of competition brought about by the deal could result in foodservice customers having to pay higher prices – which could ultimately lead to higher prices for customers in venues such as pubs, restaurants, and fish and chip shops – as well as reduced product quality.”

Colin Raftery, Senior Director of Mergers at the CMA, added: “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”

The CMA will now refer the deal for an in-depth Phase 2 investigation unless Whitby and Kilhorne Bay offer remedies which fully resolve these concerns within five working days.

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