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Co-op and Southern have asked the CMA to fast-track the case by taking into consideration undertakings in lieu that would address the concerns raised

The Co-op Group and Southern Co-op have been given until next week to persuade the Competition & Markets Authority not to launch a full-scale phase 2 inquiry into their proposed merger.

The UK’s competition watchdog today published the findings of its initial phase 1 inquiry into the merger of the two Co-op societies, which was first proposed in April this year. The CMA confirmed it had identified that the plans could result in a substantial lessening of competition (SLC) in the retail supply of groceries in convenience stories in local areas, centring around nine stores currently owned by the Co-op Group and 10 Southern Co-op-owned stores.

It also raised the possibility of an SLC in the supply of attended at-need and pre-paid funeral services in local areas centring around one Co-op Group funeralcare site and one Southern site.

Both Co-op and Southern have now asked the CMA to fast-track the case by taking into consideration undertakings in lieu that would address the concerns raised. The CMA said it has now given the Co-op societies until 22 September to offer undertakings which might be accepted by the watchdog. If no such undertaking are offered or the CMA decides these do not go far enough to address its concerns, then it confirmed it will refer the merger for an in-depth phase 2 investigation.

“We welcome the update from the CMA regarding its phase 1 review of the proposed Southern Co-op transaction,” said a Co-op spokeswoman.

“We are pleased that, as anticipated, the CMA hasn’t identified competition concerns at a national level. It has identified a small number of locations where there is both a Southern and Co-op Group presence and where they believe there may be an adverse impact on competition for consumers. We will continue to engage and work with the CMA on the proposed remedies.

“There are no changes for colleagues, members or customers at this stage.

“We remain confident in the benefits that the transaction will bring in creating more opportunities for members and driving the growth of co-operation across the UK.”

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