German food retailer Rewe has scotched reports that it is close to buying Italy's fifth-largest supermarket group Esselunga.

Rewe, which already runs over 370 stores in Italy, has been linked to the possible sale of Esselunga. Reports in Germany claimed that the group was nearing a deal with the Italian retailer.

However, a Rewe spokesman today (21 September) quashed the speculation. "We are not close to buying Esselunga," the spokesman told just-food from Cologne. "We have good contacts with them maybe but it is not time to speak about a merger."

In 1994, Rewe and Esselunga set up a venture to run discount stores in Italy. The business was wound up five years later.

The Rewe spokesman refused to comment on whether the company would be interested in buying at least a minority stake in Esselunga.

Yesterday, Tesco was equally tight-lipped over the speculation surrounding the Italian retailer. Reports in Italy claim that Esselunga's owners are ready to sell a stake in the business.