The CMA’s initial investigation into Morrisons’ completed
purchase of McColl’s shops has found competition concerns in 35
local areas where the two brands compete.
However, overall, the deal would not harm the vast majority of
shoppers or other businesses.
On 13 July 2022, the Competition and Markets Authority
(CMA)launched its
investigation after the companies submitted the reported £190
million deal for review.
McColl's operates convenience newsagent shops, with over 1,100
stores across England, Scotland, and Wales, while Morrisons
(owned by parent company Clayton, Dubilier & Rice ‘CD&R’)
has around 500 grocery stores in the UK. CD&R is also the
parent company of the Motor Fuel Group (MFG). MFG owns over 800
convenience stores, the vast majority of which are attached to
its petrol stations.
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.
During the investigation, the retailers 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 5 working days to offer proposals to the CMA to
address the competition concerns identified. The CMA would then
have a further 5 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.”
For more information, visit the Morrisons / McColl's
merger inquiry page.
Notes to Editor
- The CMA’s competition concerns relate to 35 local areas
- The CMA previously investigated
CD&R’s purchase of Morrisons and approved the deal
subject to the divestment of 87 MFG petrol stations to address
competition concerns. This process is ongoing.
