Tesco accepts OFT decision
Supermarket operator ‘will work’ with Competition Commission
March 20 2003
Tesco has pledged to ‘engage constructively’ with the Competition Commission following the decision to refer all potential supermarket bids for Safeway for a full inquiry.
The decision by the UK’s biggest supermarket operator to enter the contest by indcation a potental bid almost certainly played a part in ensuring Morrisons was referred along with Tesco, Asda and Sainsbury’s, since it ensured that all the major players were involved.
Tesco said it would now work with the Commission “to secure the best outcome for the consumer,” while remaining focussed on its core strategy.
Chief Executive Sir Terry Leahy, said: “I am not surprised by this decision, as we have always understood that competition policy limited consolidation of the four national players in our industry.
“As we expected, the authorities will now look at the implications of major structural change including the possibility of consolidation from four national players into only three. If the four national players are to be restructured into three, we believe consumers would be better off if Tesco led that change. Uniquely, Tesco brings together the qualities of a consumer champion, experience across a broad range of store types and a world class management team.”
In an oblique reference to retail entrepreneur Philip Green, whose potential bid was not referred, Tesco expressed concern that the decision “might allow a financial bidder to buy Safeway and then break up and sell on parts of the business. Any such move should be subject to prior government clearance in the normal way – and there should be a reference to the Competition Commission if it seems likely to lead to a four into three consolidation by the back door.”
Sir Terry added: “During the reference, and no matter what the outcome, we will remain focussed on delivering the best for our customers. We have already stepped up the pace in the UK as demonstrated by another set of outstanding results at Christmas.
“Tesco has the most popular customer offering in the UK – more customers choose to shop at Tesco than any other retailer. Our clear four-part strategy continues both to drive growth in food, non-food, and retail services and to develop our business internationally.”
