Watchdog’s fears over fertiliser firm merger

Origin and Bunn must move to alleviate concerns or face tie-up probe

Two major fertiliser suppliers that are in the process of merging have been given a week to come up with a plan to resolve competition concerns over their operations in Angus.

An initial probe by the Competition and Markets Authority (CMA) into Origin Enterprises’ proposed £14.2 million acquisition of Bunn Fertiliser Limited has found the tie-up could reduce competition in Scotland.

The watchdog said a coming together of the two firms could lead to price rises for customers and a reduction in the choice of fertilisers available north of the border.

Origin Fertilisers – a subsidiary company of Origin Enterprises – has a depot at River Street in Montrose, while Bunn has a long-standing operation less than a mile away in the town’s Cobden Street.

The CMA said the two companies have until next Friday to offer a resolution to their concern.

If none is forthcoming, the CMA will move to a second stage in-depth investigation of the proposed merger.

“Both companies are national blenders and distributors of fertilisers for use in agriculture,” the CMA said in a statement.

“Through its initial investigation, the Competition and Markets Authority has found that Origin and Bunn are two of the three main suppliers of fertilisers in the central/eastern region of Scotland, supplying farmers and farmers’ merchants from their sites in Montrose.

“The CMA is concerned that bringing the two firms together could see prices rise for customers or result in a reduction in the choice of fertilisers available.”

The watchdog said it had found there were sufficient alternative suppliers in other areas of Britain where Origin and Bunn operate to avoid a competition situation.

Origin Enterprises said it had “noted” the CMA’s finding and was considering its implications.

It said it will provide a further update in due course.

At the time of the acquisition announcement in March, Origin – an agri-services group – said a merger would extend its fertiliser blending activities and its customer service capabilities and enable the group to optimise operational and logistical efficiencies.

The company said it would be a cash transaction.

“Bunn is an excellent business with a dedicated commitment to addressing the crop yield, quality and soil fertility requirement of primary producers,” Origin Enterprises chief executive Tom O’Mahony said.

“Bunn advances the group’s capacity to manage supply chain complexity as well as providing complementary customer and product channel access.”

Paul Smith. Picture: The Bunn Fertiliser depot in Montrose. The Competition and Markets Authority is concerned about the firm’s proposed acquisition by neighbouring Origin Enterprises.