The UK’s Office of Fair Trading has referred Tesco’s acquisition of a former Co-op store to the Competition Commission for further investigation.

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The OFT said yesterday (19 April) that it has been in long-running negotiations with Tesco, who had agreed to sell the outlet in Slough to a suitable one-stop rival in 2004 to restore grocery competition in the area.


However, planning issues and Tesco’s failure to find a buyer caused the OFT to refer the case on for a full competition inquiry.


Explaining the OFT’s decision to act, chief executive John Fingleton, said: “Further delay here risked critically undermining the credibility of the first-phase remedies process and with it the integrity of the UK merger regime. In this case, we allowed the planning process to take its course and gave time for Tesco to come up with suitable upfront purchasers. They have not been able to do so and we must therefore bring the first-phase process to an end.”’


The news comes as the Competition Commission is engaged in a sweeping inquiry into competition in the UK grocery sector.

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“The Competition Commission now has the opportunity to review the issues in-depth, alongside its ongoing inquiry into the grocery sector, and it has remedies options that have not been available to the OFT. A detailed inquiry by the Competition Commission will therefore be in the best interests of consumers,” Simon Pritchard, director of mergers at the OFT, said.


Tesco’s executive director for corporate and legal affairs, Lucy Neville-Rolfe called the decision “a perverse outcome of the competition rules”.


“It will create further delay and uncertainty for shoppers in Slough, the vast majority of whom we know from our surveys to be happy with their experience of food shopping,” she said.


“We have always intended to redevelop and sell the Co-op site and that remains our intention. Even the suggestion that we could have to sell the Extra store is quite bizarre and would be entirely disproportionate.”