The Co-operative Group has insisted it was the first to take legal action in its dispute with UK regional retailer Haldanes Stores.
Earlier today (11 May), Haldanes said it had taken The Co-op to the High Court in a spat over stores it acquired from its larger rival in 2009 and 2010.
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In a robust statement, Haldanes CEO Arthur Harris alleged The Co-op had broken an agreement between the two companies over his company’s acquisition of 26 stores from the UK’s number five grocer.
However, in response, The Co-op said it had started legal proceedings against Haldanes last month “to recover possession of a number of the 26 stores”.
“Our decision to take legal action followed Haldanes’ failure to pay rents owing to the group and was made reluctantly after other avenues had been exhausted,” The Co-op said.
“Haldanes has indicated …. today that it has issued proceedings against The Co-operative Group, however, no proceedings have been served on the Group at the time of releasing this statement. Should they be served, we intend to contest them vigorously.”
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By GlobalDataHaldanes bought the outlets in the wake of The Co-op’s 2008 acquisition of Somerfield. The Office of Fair Trading ordered The Co-op to offload a number of stores to allay competition concerns.
Harris said The Co-op had made “material breaches” to the agreement between the two retailers and had “breached” the undertakings it made to the OFT.
“Haldanes alleges that these breaches have severely damaged the business it acquired from The Co-op, not only causing it significant financial loss, but also causing harm to consumers,” Harris said. “If we had been made fully aware of the true trading picture from the outset, we would not have done the deal with The Co-op.”
Harris also claimed The Co-op had a “real interest in driving Haldanes out of business” and had made him a “whipping boy” for stores for which it was “struggling to find a buyer”.
“The Co-op has sold me, customers in 26 local markets, and quite possibly 600 of their former employees down the river in order to do its deal with Somerfields while cynically weakening the competition their own stores face in these localities,” Harris argued.
The Co-op, however, said it had “acted in good faith” in its dealings with Haldanes and said it “categorically refutes any allegations of impropriety”.
It added: “The original transaction was subject to full due diligence on the part of Haldanes and its advisers. The Co-operative Group has complied with all our competition undertakings and, at the same time, has been pleased to support the Haldanes business financially through its start-up phase.”
