The UK's Competition and Markets Authority (CMA) has announced that it has cleared the purchase of grocery wholesaler Nisa Retail by The Co-operative Group.
In a statement, the CMA said that after examining all the evidence, it determined that the proposed merger does not raise any competition concerns.
It noted that while Nisa and The Co-operative do not compete head-to-head, the fact that Nisa supplies more than 4,000 grocery stores around the UK, the CMA 'carefully considered' the potential impact of the merger on competition between stores.
'Set Their Own Prices'
As part of its examination, the CMA 'took into account that Nisa-supplied stores would still be free to set their own prices and decide which products to stock after the merger, and so the merged company would not be able to directly determine how they compete,' the Authority said in a statement,
'It also examined whether the merged company could raise prices or reduce service quality for retail or wholesale customers. It found that existing retail and wholesale competition made this unlikely.'
In its ruling, the CMA said that it believed that there were enough local alternatives to both Co-op and Nisa-supplied stores to ensure people could still 'shop around', while Nisa-supplied stores also had the opportunity to switch between different wholesalers, or switch suppliers if need be.
'Enough Choice'
"Millions of people throughout the UK shop at convenience stores and supermarkets, and it is vital that they continue to have enough choice to get the best value for them," commented. Sheldon Mills, senior director of mergers at the CMA.
"After careful consideration, we’ve found that there is sufficient competition in both the wholesale and retail sectors to ensure that shoppers are not worse off."
The merger will therefore not be referred for an in-depth investigation, the Authority noted.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
