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ACS reacts to Somerfield

Published:  23 July, 2008

The ACS (Association of Convenience Stores) has reacted strongly to news that Somerfield has been made available for sale.

The sale of the 2.5 billion group is the latest major step in the consolidation of the grocery market. Speculation suggests that bidders for the company are three of the existing Big four grocery retailers.

ACS chief executive James Lowman, said: "We have warned about the repercussions of further acquisitions in the UK grocery market. It is this ongoing consolidation of the market into the hands of just four companies that reduces the opportunity for businesses to enter and grow in the market.

"The lack of choice and diversity that this presents now and in the future is a major blow to consumer interests."

This announcement comes as the Competition Commission enters the final phase of its investigation into whether competition in the UK grocery market is working in the interest of consumers. The prospective sale of Somerfield would require further formal investigation of the market.

Lowman added: "The competition authorities should not allow the sale of Somerfield to an existing Big four retailer as this will further entrench their dominance of the market. Nor should the authorities allow a fire sale whereby hundreds of shops are sold to the existing dominant retailers. The end result of either is reduced choice for consumers.

"As the Grocery Market Inquiry nears its conclusion this development has to make them take a long hard look at their work so far and realise that now is the time to act. If the investigation does not make it possible for companies outside the Big 4 to compete and survive in the UK grocery market, it has failed consumers."