Britain's competition regulator has raised competition concerns in 35 local areas where Morrisons and McColl’s compete.
However, the deal would not harm a vast majority of shoppers or other businesses on an overall basis, the Competition and Markets Authority (CMA) noted.
The CMA launched its investigation on 13 July 2022 after the companies submitted the reported £190 million deal for review.
Competition Concerns
Following Phase 1 investigation, the regulator noted that McColl’s or MFG convenience stores will face reduced competition in the 35 areas, if the merger is allowed to go ahead as planned.
Weaker competition could result in higher prices, or lower quality of service for customers in these areas who rely on their local shops for groceries.
During the investigation, the retailers accepted that the merger would raise concerns in some areas and asked the CMA to move straight to a discussion of remedies to address these concerns, the regulator added.
Sorcha O’Carroll, CMA senior director of mergers, said, “As the cost of living soars, it’s particularly important that shops are facing proper competition so that customers get the best prices possible when picking up essentials or doing the weekly shop. While the vast majority of shoppers and other businesses won’t lose out, we’re concerned that the deal could lead to higher prices for people in some areas.
“If Morrisons and McColl’s can address these concerns, then we won’t need to move on to an in-depth investigation. In the meantime, we’re working closely with Morrisons to ensure that it can provide the support that McColl’s needs to continue to operate during our investigation.”
McColl’s
McColl’s operates more than 1,100 convenience newsagent stores across England, Scotland, and Wales, while Morrisons has around 500 grocery stores in the UK.
CD&R, which acquired Morrisons last year, is also the parent company of the Motor Fuel Group (MFG), which owns over 800 convenience stores.
© 2022 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
