The Office of Fair Trading (OFT) may launch an initial investigation into One Stop’s acquisition of Mills Group, amid concerns over the expansion of Tesco’s shadow brand.
Tesco-owned One Stop acquired 77 Mills Group stores for an undisclosed fee on December 16, bringing its total number of stores to 598 across England and Wales. This means Tesco-owned convenience stores now number more than 1,700.
The acquisition prompted the Association of Convenience Stores (ACS) to call for an investigation into the growth of One Stop. It said the buyout may not be commonly understood to be the latest takeover of a local shop chain by Tesco and urged the OFT not to repeat the mistakes of 2002 when it allowed Tesco to purchase One Stop “without adequate scrutiny”.
The OFT has invited comments to be made on the takeover and the responses could result in an initial investigation into whether the merger should be prevented in part or whole. An OFT spokesman said an investigation would be carried out “if we think there is a prospect of a substantial lessening of competition”.
ACS Chief Executive James Lowman said: “If Tesco sought to takeover a company operating 77 large supermarkets then it would be subject to a full investigation and would most likely be blocked. We fail to see any reason why this merger should be treated differently.
“A series of takeovers of convenience store groups have taken place over the past eight years and none have been subject to a full competition investigation. In that time Tesco has grown from a convenience store estate of around 80 stores to over 1700 today. Now is the time to take a look at the broad implications of this growth for consumer choice."
One Stop chief executive David Turner said: “Acquiring 77 Mills stores means we can introduce One Stop’s quality, range and value to communities they serve.”
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