Regulator says Asda deal for Co-op petrol stations could mean higher prices

Leeds-headquartered Asda has been told to address “areas of concern” in its plan to buy Co-op petrol stations over fears the acquisition could result in higher prices or less choice for customers.

The Competition and Markets Authority (CMA) has given the supermarket chain five days to remedy the issues identified or face a more detailed probe.

There are 13 areas across the UK where the CMA fears merging Asda and Co-op businesses could lead to insufficient competition. Currently the businesses compete for customers in those locations.

Colin Raftery, CMA senior director of mergers, said: “Groceries and fuel account for a large part of most household budgets.

“As living costs continue to rise, it’s particularly important that deals that reduce competition among groceries and fuel suppliers don’t make the situation worse.

“While competition concerns don’t arise in relation to the vast majority of the 132 sites bought by Asda, there’s a risk customers could face higher prices or worse services in a small number of areas where Asda would face insufficient competition in either groceries or fuel after the deal goes through.”

Any proposals brought forward by Asda in response to the CMA would be legally binding.

Asda paid out £611m for 132 petrol forecourts in August last year. The Co-op Group sold off its petrol forecourts division to cut its debts and strengthen its balance sheet.

Responding to the CMA’s findings, Asda’s co-owner said it was looking forward to working constructively with the CMA. Mohsin Issa told Sky News: “We remain committed to our long-term strategy to build a convenience business and bring Asda’s great value in fuel and groceries to more customers and communities throughout the UK.”

Asda is owned by the Issa brothers and TDR Capital, who also control EG Group, which is one of the largest independent fuel retailers in Europe.

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