The OFT ruled that the deal did not create competition concerns at a national level, but said some stores must be sold because they are in areas where independent co-ops – which share the same buying group as the Co-op Group – were already operating. Other sites must be sold because Co-op Group and Somerfield stores are trading in the same area.
“As a regional co-op, we are disappointed by the OFT position, but not surprised,” an independent Co-op executive said. “We are now confronted by the prospect of having potentially bigger hitters facing us. A lot will depend on who gets what and we hope the Co-op Group will consult us in areas where we are directly affected.”
However, other independent societies welcomed the decision. “Although the Co-op Group will have to sell stores off – and not to other local co-op societies – this is a good result,” said Richard Samson, CEO of East of England Co-operative Society. “It will help give the big four a run for their money. Better buying terms will mean more competitive prices for consumers.”
The Co-op Group will now work on a divestment package for the stores and find suitable buyers for the OFT to approve.