A proposed merger between two poultry feed giants is to be scrutinised under a probe after the competition watchdog said the pair had failed to address its concerns which includes supply in four areas including Bury.

The Competition and Markets Authority (CMA) said it is referring the planned tie-up between the animal feed milling operations owned by ForFarmers UK and 2Agriculture for a so-called phase two probe, having warned last month that the deal could lead to price increases for farmers and push up costs for shoppers.

An initial investigation into the deal found concerns in four local areas across East Anglia, north-western England and North Wales, according to the CMA.

The CMA said the deal could reduce competition in those areas and lead to higher prices for poultry feed, lower quality feed, or have an impact on service, which could ultimately raise prices for consumers.

The firms submitted a proposal on December 30 to try to ease the CMA's concerns, but the regulator said it was not suitable and would therefore refer the deal for an in-depth inquiry.

ForFarmers and 2Agriculture, which is owned by Boparan, both make and supply chicken and other types of poultry feed in the UK.

They announced plans in July to combine their animal feed milling operations - spanning 19 mills across the UK.

The competition concerns centre on four of the feed mills operated by the two businesses - in Bury, Burston in Norfolk, Llay near Wrexham and Preston.

The combined businesses would account for between 50 per cent and 60 per cent of the supply of meat poultry feed to third parties in three of these areas - Bury, Burston and Llay - and between 40 per cent and 50 per cent in Preston.

The CMA said it is also concerned that the joint venture could unfairly favour Boparan's chicken farming and processing businesses.

This would see less choice for smaller chicken farmers and processors, who might rely on ForFarmers and Boparan for their chicken feed.

ForFarmers UK is a subsidiary of Dutch-based ForFarmers NV, which was founded as a farmer co-operative in 1896 and is now listed on the Euronext Amsterdam stock exchange.

Boparan's 2Agriculture is one of the UK's largest poultry feed suppliers and uses its production to supply Hook2Sisters, which is linked to Boparan.

Boparan also owns 2 Sisters Food Group, which supplies about a third of the chicken on UK supermarket shelves.