Wholesalers have ramped up their defence of independent retailers with the appointment of top London legal firm Macfarlanes to fight their case against Tesco’s acquisition of Adminstore.
The Federation of Wholesale Distributors is asking the Competition Appeal Tribunal to refer back to the OFT its decision to approve the acquisition. It has put aside a five-figure sum to fund the appeal, brought on the grounds that the acquisition will reduce competition in central London and reduce consumer choice.
FWD director general Alan Toft said the decision to appoint Macfarlanes underlined the wholesale sector’s commitment to protecting independents.
“Wholesalers are digging into their pockets to fund this appeal
on behalf of the total independent sector,” he said. “This is a public interest issue which needs an independent judgment in the light of the acceleration in superstore expansion in small stores.”
The first developments in the process were imminent, he said. “We are now awaiting instructions on the next steps from our legal advisors.”
At the end of last month, Macfarlanes represented the winning side in the first tribunal under the new Enterprise Act, securing victory for client IBA Health when the Court of Appeal upheld a decision by CAT to quash clearance for a merger between iSoft and Torex.
The FWD’s appeal is the first from the food industry under the Act. It has been leading the charge against the multiples’ moves into the convenience sector and is the only association seeking to block the Adminstore acquisition.
Chairman Rodney Hunt said it would fight vociferously against the “serious threat”.
In an attack on the OFT at this week’s FWD annual conference, Hunt said that he did not share the view that the acquisition was inevitable.
“This federation will use every sinew to oppose the takeover of the local store marketplace by predatory superstores such as Tesco, for we see Tesco as the arch enemy of everything we hold dear in terms of fair trading,” he said.
He referred to the OFT as “a body which seems intent on presiding over the ritual disembowelling of the independent sector by its acquiescence to the ambitions of the giant superstores”.
“The OFT on the one hand gives Tesco more market power by agreeing to acquisitions and on the other hand is forced to send auditors into the offices of superstore buyers to investigate deals which are suspected of being dodgy,” he said.
He added the “pussyfooting” had to stop and a moratorium on similar mergers introduced, during which time a full debate could be undertaken with the objective of setting up a total framework for the market.
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Siân Harrington