The Competition and Markets Authority’s initial investigation into Morrisons’ purchase of McColl’s shops has found competition concerns in 35 local areas where the brands compete.
However, it found that overall, the deal “would not harm” the vast majority of shoppers or other businesses.
The CMA launched its investigation after the companies submitted the reported £190m deal for review on 13 July.
Following its Phase 1 investigation, the CMA has found that the merger between Morrisons and McColl’s raises 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. 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.
Morrisons 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 2 investigation.
Sorcha O’Carroll, CMA Senior Director of Mergers, 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.
“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.”
