Elaine Watson
Tesco and Morrisons have launched a charm offensive to persuade shareholders, suppliers and consumer groups they are the best bet for Safeway.
The bidding frenzy surrounding the chain has fallen into a lull as potential bidders wait for the OFT to comment.
Tesco corporate affairs director Lucy Neville-Rolfe has written to bodies ranging from the BRC and IGD to the NFU and the Soil Association listing "key benefits of a Tesco bid".
The letter was intended "in the spirit of transparency", said the company. In it, Neville-Rolfe reiterated Tesco's claim that it could pick up 75% of Safeway's estate in the event of a successful bid, because their two estates were "largely complementary".
She also stressed Tesco's commitment to supporting local suppliers. However, the PR offensive did not cut much ice with some recipients. Friends of the Earth director Tony Juniper said: "Tesco is having a laugh. This chain already has British farmers and consumers in a stranglehold ­ now it wants to squeeze even tighter."
Separately, the National Consumer Council said this week all bids should be referred to the Competition Commission. Chairwoman Deidre Hutton said: "Any further consolidation would raise the question of whether a form of economic regulation may be necessary."
There is also mounting opposition in the trade to a carve-up of Safeway by the big three supermarkets.
In this week's Saturday Essay, Spar's Jerry Marwood attacks the obsession with scale in British grocery (see page 24) and Musgrave boss Seamus Scally told a conference that a Safeway break-up would be "bad for UK consumers and bad for Irish farmers and food suppliers".
Meanwhile, Morrisons' attempt to woo shareholders with its offer document failed to impress the City. Analysts said they would be "staggered" if Morrisons got the thumbs up from more than 30% of shareholders. One said: "The best outcome for Morrisons would be to fail, collect the £29.2m break fee, gain stores in Scotland and the south of England and sit as a strategic asset in UK grocery retailing."
n Morrisons' document suggested it would keep more Safeway staff than originally thought to help with integration.
>>p29 Staring into the abyss

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