The UK’s Competition and Markets Authority (CMA) has given the proposed merger of the Co-Operative and Nisa the green light.
The CMA’s findings revealed that the Co-operative Group, as a groceries retailer, and Nisa Retail, as a groceries wholesaler, do not compete head-to-head. However, since Nisa supplies over 4,000 groceries stores, the CMA has carefully considered the potential impact of the merger on competition between shops.
It also examined whether the merged company could raise prices or reduce service quality for retail or wholesale customers. It found that existing retail and wholesale competition made this unlikely. This is because there are enough local alternatives to both Co-op and Nisa-supplied stores to ensure that people could still shop around to get the best value for them.
The £140m offer was made last October, after rival Sainsbury’s walked away from a potential acquisition of Nisa.
Sheldon Mills, Senior Director of Mergers at the CMA, said: “Millions of people throughout the UK shop at convenience stores and supermarkets, and it is vital that they continue to have enough choice to get the best value for them.
“After careful consideration, we’ve found that there is sufficient competition in both the wholesale and retail sectors to ensure that shoppers are not worse off.
Furthermore, Nisa-supplied stores are able to choose between several different wholesalers and would be able to switch supplier if prices were to increase or the quality of service go down as a result of the merger with Co-op.