Cargill is to fold its UK fresh chicken business in with
rival Faccenda Foods in the latest sign of consolidation in the UK market,
after the purchase of Moy Park by US-based Pilgrim's Pride.
Cargill - one of the big four agricultural trading houses,
with Archer Daniels Midland, Bunge and Louis Dreyfus – said that it and
Faccenda would have equal shareholding in the new venture, which will employ
The tie-up will merge Cargill's UK-based fresh chicken
business – but not the import and export activities, and the Wolverhampton-based
cooked poultry arm – and all Faccenda Foods' chicken, turkey and duck
The new business, whose name will be revealed once the deal
is closed, will "have the capability to respond to changing customer needs in
the retail and food service sectors", the groups said in a statement.
"It will operate across multiple agriculture and operational
And the deal comes as European Union poultry producers,
already facing growing import volumes from Ukraine, face the prospect of
enhanced competition from UK-based Moy Park, which is being bought by US poultry
giant Pilgrim's Pride in a $1.3bn deal.
Bill Lovette, the Pilgrim's Pride chief executive, said on
announcing the acquisition two weeks ago that "the acquisition gives us access
to the attractive UK and European markets, which advances our strategy of
diversifying our portfolio to be more global".
Janet McCollum, the Moy Park chief executive, said that "Moy
Park will provide Pilgrim's with a platform for growth in Europe.
For Moy Park, which is being sold by beleaguered meatpacking
giant JBS, "joining Pilgrim's gives us the opportunity to accelerate our growth
Already, in June, UK-based food group 2 Sisters Food, which
is centred on poultry operations besides owning brands such as Fox's biscuits, unveiled
a 37% drop in operating profits for what it said was a "tough trading quarter
for the business.
"The competitive landscape remains challenging."
'Strategy for growth'
Chris Langholz, the president of Cargill Poultry, termed the
Cargill and Faccenda operations "complementary", adding that "combining into
one entity allows us to build on our strengths, grow in the market and better
serve our customers".
Cargill said that that "the new company will have the capability to respond to changing customer
needs in the retail and food service sectors with a strategy for growth", adding that the deal was subject to clearance by
antitrust officials, "which typically takes 4-6 months".
The tie-up will be headed by Andy Dawkins, the Faccenda managing director, who began his career at the Cargill chicken business, then called Sun Valley Foods.