THE deal between the Costcutter Supermarkets Group and wholesaler Palmer & Harvey which sees Mace Stores transfer into the Costcutter organisation is to be examined by the Office of Fair Trading.
The major agreement, announced in March, also revealed the formation of a powerful new buying group called the Buyco and came after a long period of speculation about the future of the Costcutter group’s distribution arrangements once its contract with Nisa ran out.
A statement from the OFT said the body would be “considering whether this agreement has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”
Commenting on the announcement Darcy Willson-Rymer, CEO Of Costcutter Supermarkets Group, said: “We can confirm that the merger of the Mace stores into Costcutter Supermarkets Group from Palmer and Harvey is being considered by the Office of Fair Trading. We are fully complying with their request for information.
“The impact on market competition was part of our considerations when completing the deal with Palmer and Harvey and we are therefore confident that the OFT and, should it prove necessary, the Competition Commission will agree with our position.
“Ultimately, this deal is about bringing together two groups of independent retailers to enable us to get lower prices for all of our members.”
