The Office of Fair Trading has referred Tesco’s acquisition of three of the Co-operative Group's stores to the Competition Commission.

Last November, the OFT said that it was to consider whether “a relevant merger situation has been created” when Tesco bought stores from the Co-op in Slough, Nottingham and South Shields.

The OFT believes that there is a significant prospect that this transaction would substantially lessen competition in one-stop grocery shopping in the vicinity of the former Co-op store in Slough.

The OFT is concerned that by reducing choice between local one-stop shops, the acquisition could mean higher prices, and lower quality service, for local consumers.

Tesco has indicated to the OFT that it would be prepared to sell the acquired Co-op store to address possible concerns.