Business Irish

Monday 20 February 2017

Musgrave's Superquinn buy 'blocked new entrant'

Retail

Emmet Oliver , Deputy Business Editor

Published 05/12/2011 | 05:00

Not selling Superquinn to Musgrave might have allowed a new entrant to enter the Irish grocery market, the Competition Authority has admitted.

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Superquinn was sold to Musgrave in late September after the chain went into receivership during the summer. The Competition Authority backed the deal recently but has now released the full version of its decision.

The authority admits that: "The acquisition of Superquinn would therefore represent a potentially attractive means for a new entrant to enter the Irish market, both nationally and within the Dublin region.

"Musgrave, by contrast, is already in the Irish market and, as submitted by third parties, the proposed acquisition would effectively block this entry avenue to a new competitor.''

The judgment reveals there was one other "serious'' bidder for Superquinn, but the identity of the bidder is not revealed.

However, the authority outlines a range of reasons why it doesn't believe Musgrave was trying to block a new entrant.

One of these is that Musgrave did not pay a "premium'' price to buy Superquinn.

"The authority has not seen any evidence from internal documents to support the theory that the proposed transaction is a strategy to block entry.''

The authority admits that if Musgrave didn't buy Superquinn, that wouldn't have necessarily been the end for individual stores. It admits a viable alternative would have involved selling at least some assets to competitors "and/or new entrants''.

Four retailers made submissions to the authority, with two of these virtually identical with respect to the specific concerns raised. The main points made in the submissions were:

• Musgrave would increase its market share in the State after buying Superquinn.

• The proposed transaction would lead to localised monopolies and/or a reduction in competition in certain local areas.

• There would be a reduction in choice in grocery goods for consumers.

• The main players in the retail grocery sector would account for almost 75pc of the market.

However, the authority concluded, on the basis of the available evidence, that the proposed transaction would not lead to a "substantial lessening of competition'' in the supermarket sector.

Irish Independent

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