MFG says it is keen to engage with the Competition and Markets Authority (CMA) to avoid a full merger investigation after it raised a concern over MFG’s takeover of Murco’s retail business.
The CMA said MFG had the chance to avoid a full merger investigation if it could offer a solution to address competition concerns in Hythe in Kent.
MFG acquired 228 Murco branded petrol stations and 226 fuel supply contracts for independent dealers from Murco in October. Pre-acquisition, MFG owned and operated 60 petrol stations in the UK under the BP, Jet, and Total brands.
The CMA has found that the deal raised competition concerns that could lead to higher petrol and diesel prices in the area of Hythe, Kent, where MFG operates the BP petrol station with a Murco petrol station as its nearest rival pre-merger.
After the merger, with MFG controlling the Murco petrol station, MFG will face only one separate competitor within a 10-minute drive-time of its petrol station.
The CMA did not find any competition concerns resulting from the deal in other areas of the country (whether on a national or local basis) or regarding the retailing of auto-LPG, the retailing of groceries or the wholesale supply of fuel to third parties.
Michael Grenfell, senior director and decision maker in this case, said: “In the Hythe area, where the merging parties’ petrol stations are situated close to each other, we are concerned that there is a realistic prospect that after the merger there will be insufficient competition from other petrol stations in the area to prevent higher prices or service levels being compromised. We therefore propose to refer the merger for an in-depth investigation unless MFG offers an acceptable remedy to address our competition concerns in a clear-cut way.”
MFG managing director Jeremy Clarke commented: “We are delighted that the CMA has only found one location, Hythe in Kent, where it believes there are competition concerns with MFG now operating two stations that are situated close to each other.
“MFG is keen to remedy the competition concerns in a clear-cut way and to avoid an in-depth CMA investigation. We will, therefore, be working with the CMA to arrive at a quick and acceptable solution.”