WIREDGOV

The Office of Fair Trading (OFT) and Competition Commission (CC) have today published a joint commentary on retail mergers.

The commentary draws together some of the common themes that have arisen in the various retail cases examined by the two authorities since the Enterprise Act 2002 came into force over seven years ago.

The commentary covers a broad and diverse range of cases, including mergers of mobile phone outlets, bookshops, DIY stores, opticians and specialist food shops and shows how the authorities have developed their approaches and techniques. Often these mergers have involved analysis across a large number of local outlets, some owned by large national chains, some by smaller independent companies - as well as companies supplying over the internet. 

The commentary focuses on three of the questions that have most often arisen in past cases, concerning:

• the local catchment area for retail outlets
• the extent to which competition takes place at the local and national levels
• the techniques used to assess how mergers might affect retail prices.

Amelia Fletcher, OFT Chief Economist said:

'The UK retail sector is one of the most important for individual consumers. Over the past seven years, the OFT and CC have developed considerable experience in reviewing merger cases across many different types of retail business. This commentary should, I hope, help provide a real insight into the approaches and analyses undertaken by the two authorities during retail merger inquiries.'

CC Chief Economist, Alison Oldale said:

'I welcome this successful collaboration between the OFT and the CC. I very much hope that the commentary will be of interest to retail companies and their advisers, in setting out in a single joint document key themes that the OFT and the CC have explored across a broad spectrum of retail cases.'

NOTES

1. Today's publication, Commentary on Retail Mergers (pdf 344 kb) is available on the OFT website and the Competition Commission website.
2. The OFT is the UK's combined competition and consumer authority. In relation to merger activity, it is the first phase review body. Where necessary, it refers any relevant mergers to the CC for further investigation at second phase. 
3. The CC is an independent public body, which carries out investigations into mergers, markets, and the regulated industries.
4. The document published today is a commentary based on past merger cases in the retail sector and does not constitute guidance under section 106(1) and (3) of the Enterprise Act 2002. The OFT and CC published joint Merger Assessment Guidelines in 2010, to which the Authorities will have regard when investigating merger cases.