Morrisons acquisition: CMA raises competition concerns over fuel

The Competition and Markets Authority has flagged competition concerns over the acquisition of supermarket group Morrisons by Clayton, Dubilier & Rice (CD&R).

The watchdog today said the takeover could lead to higher fuel prices in 121 locations across the country where both firms own forecourts.

CD&R also owns Motor Fuel Group, the largest independent operator of petrol stations in the UK with 921 forecourts. Morrisons operates 339 sites.

“Prices for petrol and diesel have recently hit record highs, which makes it even more important that we don’t allow a lack of competition at the pump to make the situation worse,” Colin Raftery, senior director of mergers at the CMA, said.

“We’re concerned that this deal could lead to higher prices for motorists in some parts of the country. But if CD&R and Morrisons are able to address these concerns, then we won’t need to move on to an in-depth investigation of the merger.”

The CMA has launched its inquiry into the £7 billion acquisition in January, and following its Phase 1 investigation it has found that the deal raises competition concerns in relation to the supply of petrol and diesel in 121 local areas across England, Scotland and Wales. These are all areas in which MFG and Morrisons both have petrol forecourts and would face only limited competition after the merger, meaning that the deal could lead to an increase in prices.

CD&R has five working days to offer proposals to the CMA to address the competition concerns identified. The CMA would then have a further five working days to consider whether to accept these in principle instead of referring the case to a Phase 2 investigation.