Safeway ruling welcomed by consumer watchdog
Morrisons takeover ‘boost to competition’
September 26 2003
The Consumers’ Association is claiming some of the credit for the ruling that clears Morrisons to bid for rival supermarket chain Safeway.
The consumer watchdog said the decision was a victory for consumers “as well as clear vindication of Consumers’ Association’s call for only the Morrisons bid to be cleared.”
The CA backed the Morrisons bid in a submission to the Competition Commission, claiming consumer choice would be preserved by retaining a strong fourth player in the UK grocery sector
Phil Evans, principal policy adviser for the CA, said: “A successful Morrisons/Safeway combination provides British consumers with an effective fourth supermarket choice. The fact that Morrisons is a low cost, low price operator will boost competition in areas where Safeway currently operates.
“Where consumers could have been left with three big players and a handful of smaller operators, which could well have dwindled to two had either Asda or Tesco been allowed through, consumers now have the possibility of choosing between four big groups.
“While Morrisons have today gained a green light to get a national foothold in this enormously important market for consumers, Britain’s consumers have also gained greatly and the robust nature of competition in this market has been safeguarded for the foreseeable future.”
Describing Philip Green’s next move as “the great unknown factor,” Evans said the CA doubted that Safeway could maintain its position as a standalone player even under Green’s ownership.
He said: “We continue to believe that the best option for Britain’s consumers lies in a strengthened fourth player boosted by national coverage and aggressive price competition.”
