UK supermarket giant Tesco announced yesterday [Thursday] that it has agreed an offer of £53.7m (US$98.9m) for 45 convenience stores in central London, but one of its rivals is calling for the deal to be investigated by UK competition authorities.

Bill Grimsey, chief executive of Big Food Group, which owns frozen food retailer Iceland, called for a Competition Commission inquiry into the acquisition.

Grimsey wants regulators to consider the grocery market as a whole, rather than breaking it down into two sectors – large superstores and convenience stores, reported the Guardian. The Competition Commission made a ruling in 2000 that split the UK’s food retail market into those two sectors. Although Tesco has a market share of around 27% in the superstore section, it has only 5% of the convenience store market.

“Terry Leahy says he only has 5% of the market,” Grimsey was quoted by the Guardian as saying. “But that is nonsense. Tesco has a huge share of the grocery market. The Competition Commission made a mistake in 2000, and all I am asking is for this deal to be referred so they can reconsider.”  

“Ultimately choice will come down to just Tesco and Asda/Wal-Mart, maybe not now, but maybe in ten years’ time. If that is what people want, then fine. But let’s consider it properly,” Grimsey added.