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.
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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.
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