The OFT has accepted undertakings offered by Midcounties Co-operative Limited (Midcounties) to address the competition concerns arising from its completed acquisition of Tuffin Investments Limited, the grocery and fuel retailing business of Harry Tuffin Limited.
As a result, the merger will not be referred to the Competition Commission.
The OFT announced in October 2012 that it was suspending its duty to refer the merger to the Competition Commission because it was considering whether to accept undertakings in lieu of a reference. The OFT’s investigation had found that the merger would create competition concerns in the retailing of groceries around the four local areas of Bishop’s Castle and Craven Arms/Church Stretton in Shropshire, and Lydney and Coleford in Gloucestershire.
In order to address the OFT’s competition concerns, Midcounties has offered to sell the Harry Tuffins’ store in Bishop’s Castle and either the Harry Tuffins’ or the Midcounties’ store in each of Craven Arms/Church Stretton, Lydney and Coleford.
The OFT assessed and consulted publicly on the proposed undertakings. The OFT has not received any representations and on the basis of the evidence before it has concluded that the undertakings are appropriate to remedy the competition concerns it had identified.
The OFT will need to be satisfied that a proposed purchaser or purchasers for the stores identified is independent of Midcounties, has the resources, expertise, incentive and intention to maintain the business and can be expected to receive all relevant regulatory and licensing approvals required. Furthermore, the OFT must be satisfied that the sale of the stores will not in itself raise competition concerns.
Amelia Fletcher, chief economist at the OFT and decision maker in this case, said: "The divestments offered by Midcounties will remove the overlap in each of the four local areas of Bishop’s Castle, Craven Arms/Church Stretton, Coleford and Lydney, restoring the level of competition in grocery retailing that existed pre-merger. This will ensure that customers in these local areas continue to benefit from competition when buying groceries."