Mole Valley has been challenged to address competition concerns relating to its proposed purchase of Countrywide Farmers’ retail outlets.
The agricultural co-op, which had a turnover of £420m in the most recent year’s accounts, plans to buy 48 Countrywide Farmers’ outlets.
This follows Countrywide Farmers’ announcement last year that it would sell its remaining 53 retail stores after making losses of £9.9m in 2016.
However, the Competition and Markets Authority (CMA) has identified competition concerns in 45 local areas, should the merger go ahead.
The investigation found that while businesses face competition from other suppliers that operate without local premises, many customers prefer to be able to buy products directly from a supplier’s store.
As a result, these alternative suppliers may not provide enough competition to stop customers from losing out post merger.
Rachel Merelie, acting executive director of mergers and markets at the CMA, said: “It is our job to make sure that people continue to have enough choice, get fair prices and good quality products after company’s merge.
“Mole Valley and Countrywide Farmers are two of the biggest operators of country stores, and so it is important that their customers can find good deals when they need to buy these kinds of products.”
Julie Edwards, head of communication at Mole Valley, said: “We are continuing to work with Countrywide to determine a positive conclusion to the proposed purchase.
“With these 48 stores, there are over 600 members of staff, so this is as much for their peace of mind to get this resolved sooner rather than later.”
The CMA has now put it to Mole Valley to address the concerns and provide a resolution to mitigate against reduced competition. Should the company not address this, the merger will face further in-depth investigation.