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Saturday, 23 December, 2000, 11:38 GMT
Salmon firm takeover blocked
Salmon
Hydro Seafood is the world's biggest salmon farming firm
The Department of Trade and Industry has blocked a merger of two of the fish farming industry's biggest companies in Scotland.

The DTI said Nutreco's proposed acquisition of Hydro Seafood would lead to more expensive salmon and was against the public interest.

Nutreco is the largest supplier of salmon feed in Britain, and Hydro Seafood is one of the biggest salmon farming companies in the world.

Fish farm workers
The firm is a major producer in Scotland
Competition Minister Dr Kim Howells said the merged company would have too much power in Scotland, manipulating feed prices and reducing competition.

This, he said, would lead to more expensive salmon for the consumer.

In order to protect the Scottish salmon industry and the public interest he said the only option was to prohibit the deal.

Dr Howells accepted the conclusions of a Competition Commission report and the advice of the Director General of Fair Trading (DGFT).

He said: "The Competition Commission found that the merger would reduce competition in the market for salmon feed and lead to increased prices.

Price rise fear

"Although the merger would not increase Nutreco's share of feed supply, the Competition Commission concluded that its already strong position in the market, coupled with an increased share of the customer base, would enhance its position in the market at the expense of competitors and customers.

"Nutreco's position in the market would enable it to raise prices to salmon producers, and as salmon feed is a major component of the costs of salmon production such price increases could lead to increased prices for end consumers.

"In particular, the Competition Commission concluded that those customers and end consumers who specifically wanted Scottish salmon could face higher prices."

Last year Nutreco bought over Marine Harvest McConnell in a 32.7m deal.

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See also:

16 Nov 00 | Scotland
Salmon industry cash appeal
02 Nov 00 | Scotland
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28 Oct 00 | Scotland
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15 Jul 99 | The Company File
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