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The Competition and Markets Authority (CMA) has found competition concerns in only a small number of local areas after launching an investigation into Morrisons’ completed purchase of McColl’s, following the submission of the supermarket’s £190m deal for review.
The authority said that overall, the deal “would not harm” the vast majority of shoppers or other businesses.
Following its ‘phase one’ investigation, the CMA found that the merger between Morrisons and McColl’s raised competition concerns in 35 areas, where McColl’s or MFG convenience stores will face “reduced” competition if the deal is allowed to go ahead as planned.
As a result, it said weaker competition could lead to higher prices or a lower quality service for the customers in these areas who rely on their local shops for groceries.
During the investigation, the retailers reportedly accepted that the merger would raise concerns in some areas and asked the CMA to move straight to a discussion of remedies to address these concerns.
Morrisons now has five working days to offer proposals to the CMA to address the competition concerns identified. The CMA would then have a further five working days to consider whether to accept these in principle instead of referring the case to a ‘phase two’ investigation.
Sorcha O’Carroll, senior director of mergers at CMA, said: “As the cost of living soars, it’s particularly important that shops are facing proper competition so that customers get the best prices possible when picking up essentials or doing the weekly shop.
“While the vast majority of shoppers and other businesses won’t lose out, we’re concerned that the deal could lead to higher prices for people in some areas. If Morrisons and McColl’s can address these concerns, then we won’t need to move on to an in-depth investigation.”
She added: “In the meantime, we’re working closely with Morrisons to ensure that it can provide the support that McColl’s needs to continue to operate during our investigation.”
