The UK’s Office of Fair Trading has confirmed to just-food that it is investigating Tesco after reports that the company used a local retailer to “front” an application for a massive supermarket development.
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In June a planning application was submitted under the trading name of local retailer Brian Fords Discount for an 80,000 square foot store in Barnstaple, Devon. However, Tesco had acquired the company the previous year.
According to The Sunday Telegraph, the planning application “trumpeted” the involvement of the local retailer, stated that the development would be branded Brian Fords and made no mention of Tesco’s involvement in the scheme.
“Brian Fords Discount Store has traded in Barnstaple for over 30 years… the company has been actively involved in local commerce and has both an excellent reputation and a loyal and extensive customer base in the area,” the application read, according to the newspaper.
This has reportedly caused rivals to accuse Tesco of using underhand tactics.
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By GlobalDataAdditionally, Tesco already operates a 42,000 square foot out-of-town superstore on the outskirts of Barnstaple, causing concern that the acquisition of Brian Fords created a local monopoly.
A spokesperson for the OFT told just-food: “We’re looking into the acquisition of Brian Fords Discount.”
While the OFT does not have the legal right to block or undo the merger, the spokesperson said that its powers included referring the case to the Competition Commission or requiring that Tesco divest certain stores.
Tesco was unavailable for comment as just-food went to press.
