// The CMA have found Asda’s £600m takeover of Co-op petrol stations could mean “higher prices” for consumers
// Asda has five working days to address the CMA’s concerns otherwise it will be referred for an in-depth, Phase 2 investigation
The Competition and Markets Authority (CMA) has found that Asda’s £600m takeover of Co-op petrol stations could mean “higher prices or less choice” for consumers.
The Phase 1 investigation launched in January and focused on the 13 local areas where Asda and the 132 Co-op sites that it acquired compete to provide fuel or groceries to customers.
The watchdog found that allowing the deal, that was agreed in October last year, could lead to consumers and businesses in those areas facing higher prices of lower quality services when shopping or buying fuel.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
Asda informed the CMA that would not come to fruition because the merger would enable it to bring its low-cost pricing model to more customers.
However, the investigation focused on local areas where both retailers already operate, meaning Asda prices are already an option for those consumers and allowing the retailer to acquire more sites in those areas could reduce competition in the future.
Asda now has five working days to offer legally binding proposals to the CMA to address its concerns otherwise it will be referred for an in-depth, Phase 2 investigation.
CMA senior director of mergers Colin Raftery said: “As living costs continue to rise, it’s particularly important that deals that reduce competition among groceries and fuel suppliers don’t make the situation worse.
“While competition concerns don’t arise in relation to the vast majority of the 132 sites bought by Asda, there’s a risk that customers could face higher prices or worse services in a small number of areas where Asda would face insufficient competition in either groceries or fuel after the deal goes through.”
Commenting on the CMA’s findings, Asda co-owner Mohsin Issa said: “We note the findings of the CMA’s Phase 1 inquiry into our acquisition of 132 Co-op stores and their identification of 13 potential areas of competition concern.
“We look forward to working constructively with the CMA over the coming days as we consider their findings.
“We remain committed to our long-term strategy to build a convenience business and bring Asda’s great value in fuel and groceries to more customers and communities throughout the UK.”
Click here to sign up to Retail Gazette‘s free daily email newsletter
