UK supermarket group Tesco is facing a last minute challenge to its £53m (US$96.2m) acquisition of convenience store group Adminstore.
The deal had been cleared by the UK’s Office of Fair Trading, but now the Federation of Wholesale Distributors has joined with Big Food Group, which owns frozen food retailer Iceland, to launch a legal appeal against the OFT’s decision, reported The Independent.
Alan Toft, director general of the Federation of Wholesale Distributors, said the OFT’s ruling was flawed.
“By giving Tesco the green light, the OFT is merely adding to Tesco’s buying power,” Toft said, adding that this was a strange thing for the OFT to do when it is also investigating claims that supermarket groups have been abusing their buying power, the newspaper said.
Bill Grimsey, CEO of Big Food Group, said the OFT’s decision was based on a “misguided assumption that the grocery market is divided, when it is clear that there is only one market for groceries”.
Although it has a 27% share of the UK grocery retail market, Tesco was allowed to buy Adminstore without a competition inquiry because its share of the convenience store market is only 6%.