Office of Fair Trading scrutiny of the grocery sector increased this week when it gave the trade until March 9 to comment on any “competition or public interest” issues arising from Sainsbury’s acquisition of the Bells Stores chain.
The announcement came as the OFT continues to probe Tesco’s proposed acquisition of Adminstore, another deal where a major multiple is looking to acquire a regional c-store chain.
The OFT said that it was considering whether the Sainsbury deal to acquire the
54-strong Bells c-store chain could “result in the creation of a relevant merger situation” under the 2002 Enterprise Act.
If this were the case, the OFT would consider whether this would result in “a substantial lessening of competition” within the convenience market that warranted a referral to the Competition Commission. The move comes as c-store bosses press the OFT to quash its ‘arbitrary’ distinction between the convenience and one-stop shopping markets, which they claim has allowed the multiples to sail into the high street and the suburbs unopposed.
However analysts said the announcement was a formality and expected the deal to go through without a referral. Sainsbury said it was confident the deal would not attract regulatory interest.
A spokeswoman said: “This is standard OFT procedure. We do not believe there are any competition issues. Bells is a small convenience operator and Sainsbury is not a major player in this geographical area.”
The OFT is set to decide whether to refer Tesco’s acquisition of Adminstore, the London-based chain trading under the Europa, Cullens and Harts the Grocer fascias, to the Commission by March 5.
Elaine Watson