Norway’s Competition Authority has placed a temporary block on a tie-up between retailers ICA and NorgesGruppen while it examines whether the deal could lessen competition in the market.

In January, the retailers announced plans to join forces in the areas of sourcing, logistics and distribution.

However, the integration of the two firm’s back-end operations has now been put on hold while Norway’s competition watchdog assesses the case.

A spokesperson for the regulator told just-food:. “We are looking at whether the agreement will result in a concentration of power in the market that would diminish competition,” the spokesperson said.

The temporary ban will remain in place until the end of September while the competition watchdog analyses the proposal.

ICA is mulling an appeal. “For ICA Norway, this decision means that the implementation process will be discontinued. ICA will now analyse the Authority’s decision and consider whether the decision will be appealed,” it said.

A spokesperson for ICA told just-food it had been “hoped” the agreement would increase ICA’s buying power and enable it to secure better procurement deals in Norway. The arrangement was a “significant step” in ICA’s attempts to turn its Norwegian business around, the spokesperson added. 

The company declined to comment on the impact the delay – and possible block – could have on its struggling Norwegian business, which has seen a number of initiatives to reduce its cost base, including the sale of Maxi outlets.

Meanwhile, Norgesgruppen indicated it will “review the decision” and “consider what to do next”.