ACS calls for OFT to stop Tesco and Mills merger

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Mills Group: ACS calls on OFT to prevent takeover by Tesco

The Association of Convenience Stores (ACS) has written to the Office of Fair Trading calling for the merger between Tesco and Mills Group to be stopped.

Responding to a request for evidence on the acquisition, the ACS has asked the OFT to take into consideration whether consumers’ interests are harmed by the differing pricing, range and service levels in Tesco’s One Stop format.

The ACS urges the OFT “to undertake a full assessment of the implications of this growth on consumer choice; routes to market for new products; and marketing, price and service in retail outlets”.

ACS chief executive James Lowman said: “If Tesco sought to take over a company operating 77 large supermarkets then it would be subject to a full investigation and would most likely be blocked. We fail to see any reason why this merger should be treated differently.

“A series of takeovers of convenience store groups have taken place over the past eight years and none have been subject to a full competition investigation. In that time Tesco has grown from a convenience store estate of around 80 stores to over 1,700 today. Now is the time to take a look at the broad implications of this growth for consumer choice.

“In particular the authorities should satisfy themselves Tesco operation of the One Stop brand is in the consumers’ interest. To do this they must undertake a full comparison of price, quality, range and service, and satisfy themselves that consumers are not being disadvantaged.”