Following an investigation by the Competition and Markets Authority (CMA), UK supplier Whitby Seafoods has dropped its acquisition of Kilhorne Bay Seafoods.

Whitby Seafoods agreed to buy Kilhorne Bay Seafoods on 2nd May 2023 and voluntarily notified the deal to the CMA, which launched a merger review into the deal on 8th August 2023.

A Phase One investigation conducted by the CMA found that Whitby Seafoods already holds a “very strong” market position in the supply of breaded scampi to foodservice customers, with the supplier facing limited competition from potential market entrants and suppliers of other types of breaded seafood.

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

Colin Raftery, senior director of mergers at the CMA, said: “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.”