Race to the checkout

5 February 2003

The Big Three should be referred for further scrutiny. And the regulatory waters are murky for KKR, and perhaps even Phiilp Green. But there s no logical reason why Morrison s bid should be scooped in with the rest.

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The Office of Fair Trading is considering bids for the UK's fourthlargest supermarket chain. A decision on which bids will be referred to the Competition Commission for further scrutiny is awaited by early March.

The National Consumer Council on on Tuesday wrote a letter to the Office of Fair Trading arguing that all six of Safeway's suitors should be referred to the Competition Commission. The letter said that the market structure of the supermarket sector could be at stake and that before any takeover is approved, evidence is needed to conclude that consumer choice will not be hindered by the creation of either local monopolies or a national oligopoly.

The letter also highlighted that nonsector bids that propose to breakup Safeway and divest all its stores to a combination of incumbent supermarkets must be judged both against the risk of local monopolies and the creation of a national oligopoly.

Philip Green, the retail tycoon has recently been ordered to make a full submission to the Office of Fair Trading. He had previously expected to be able to launch a bid quickly, but now says it will take him several weeks to do so.

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