The Association of Convenience Stores has called on the Office of Fair Trading to block Tesco’s acquisition of Mills Group.
Tesco’s convenience chain, One Stop, acquired the independent business last month and the deal is currently being scrutinised by the OFT.
The ACS has responded to the watchdog’s request for evidence and said it wants the OFT to consider whether consumers’ interests would be harmed by the differing pricing, range and service levels in the One Stop format.
“If Tesco sought to take over a company operating 77 large supermarkets, it would be subject to a full investigation and would most likely be blocked,” said ACS chief executive James Lowman. “We fail to see any reason why this merger should be treated differently.”
Lowman added: “A series of takeovers of convenience store groups have taken place over the past eight years and none have been subject to a full competition investigation. In that time Tesco has grown from a convenience store estate of around 80 stores to over 1,700 today. Now is the time to take a look at the broad implications of this growth for consumer choice.
“In particular, the authorities should satisfy themselves that Tesco’s operation of the One Stop brand is in the consumer’s interest. To do this, they must undertake a full comparison of price, quality, range and service and satisfy themselves that consumers are not being disadvantaged.”
Saturday Essay: Tesco should face tough questions from the OFT (8 January 2011)
OFT to examine One Stop’s swoop for Mills (20 December 2010)
Tesco grows One Stop with swoop for northeast indie Mills Group (16 December 2010)