Somerfield to sell 14 stores to comply with competition laws |
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Published
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Wed, 27 Jul 2005 09:35
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LONDON: The Competition Commission has provisionally found that the completed acquisition by retailer Somerfield of 115 stores and other assets from Wm Morrison Supermarkets could be violative of the competition provisions pertaining to 14 local grocery retail markets. The regulator has given time until 16 August for the retail major to respond to the provisional findings.
The regulator's inquiry chairman Christopher Clarke said in a statement: "We believe the only
effective means of restoring competition in these areas is for the identified stores to be sold to a suitable grocery retailer who will offer choice and actively compete in the relevant local markets."
Somerfield had completed the 260-million-pound transaction in October 2004. Most of the stores
acquired are mid- range ones, which Morrisons got as part of the acquisition of Safeway in 2004.
Said Clarke: "We identified stores in 14 areas where we have provisionally found that the acquisition is expected significantly to reduce competition - resulting in higher prices, or reductions in quality, range or service."
The identified stores are located in Bedlington, Filey, Johnstone, Kelso, Littlehampton, Middlesbrough Linthorpe, Newark, Paisley, Peebles, Pocklington, Poole Bearwood, South Shields, Whitburn in Scotland and Yarm.
Somerfield, which is in the process of refurbishing the acquired stores, said it will be making
representations both in writing and at the remedies hearing.
The company itself is a takeover target with talks progressing with private equity firm Apax, which is one of two groups bidding to buy out the company. The other is London & Regional, a property group, which is teaming up with Japanese bank Nomura.
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