Countrywide headquarters© Clint Randall

The ruling of a government regulator has been called into question after it delayed a buyout for stricken rural retailer Countrywide Farmers.

The chain plunged into administration on 7 March after the Competition and Markets Authority (CMA) ruled a proposed buyout by Mole Valley Farmers had to be subjected to a secondary investigation.

This was over concerns that competition would be reduced for customers, despite warnings the company was likely to fall if a buyer was unable to ride to the rescue.

See also: Countrywide farmers calls in the administrators

The two rival chains had attempted to claim that there was enough difference between them that customers would not be affected.

According to documents submitted to the CMA, Countrywide’s strategy had been to “depart from its agricultural origins”, and focus on selling to in-store customers instead of direct to farmers.

This was demonstrated by them selling off elements such as their bulk feed business to Dutch company ForFarmers in 2014.

Farmer-owned Mole Valley, which had a turnover of £464m in 2016-17, offers similar in-store products but continues to focus on farmer customers, with 10 of their 55 stores exclusively focused on direct-to-farm bulk agricultural products.

Purchasing behaviour

Together with Countrywide, they contended the CMA should therefore take into account there was substantially different purchasing behaviour between the two company’s customers, minimising the risk of reducing competition.

However, a CMA spokesman said: “We regret to hear the news that Countrywide has gone into administration, as a result of significant trading difficulties and cashflow pressures.

“In our initial investigation, we found that Countrywide merging with its closest rival could reduce competition and it could have pursued offers for the business that would lead to a better outcome for customers.

“We therefore had no other option than to refer Mole Valley’s purchase of Countrywide for further in-depth investigation.”