Of course Just Eat’s deal has to be checked

The intervention of the Competition and Markets Authority (CMA) in the takeover of Just Eat has prompted predictable outrage from those involved in the £5.9bn deal. Cat Rock Capital, which owns 3pc of Just Eat’s shares and 6pc of Dutch suitor Takeaway.com, described the last-minute inquiry as “shocking and clearly unwarranted”.

It needs to get a grip. The regulator is simply being consistent. Its intervention in Sainsbury’s merger with Asda and the opening of an inquiry into Amazon’s plan to buy a stake in Deliveroo showed the UK has a competition policeman willing to exercise its powers.

The CMA couldn’t simply wave through a deal of this size without properly investigating whether it is in the UK’S interests. It is duty bound to look at its impact on consumers, suppliers and rival food outlets. Will a combination of UK market leader Just Eat and Takeaway. com, one of Europe’s biggest players, be detrimental to the takeaway food market? Will choice be affected? What will happen to prices? And what of the brilliant technology that powers Just Eat’s impressive operations – will it end up in the right hands? All important questions any regulator worth its salt should ask.

In the past, the CMA has been all too happy to wave through deals that have gone on to be detrimental to the consumer landscape. Think Facebook’s takeover of Instagram and Google’s purchase of Doubleclick. Under the new regime of Andrew Tyrie, the CMA seems determined to avoid the same mistakes.

Central to the CMA’S investigation is whether Takeaway.com would have re-entered the UK market if it wasn’t merging with Just Eat. The Dutch firm cut its fledgling British arm in 2016 after racking up big losses but went on to become one of Europe’s largest names, with operations in 11 countries, taking tens of millions of orders a year.

The firm says it had no such plans to come back to the UK. If so, then the CMA may well rule that there is no justification for blocking the tie-up and wave through the takeover of Just Eat. In which case, Cat Rock has nothing to worry about but its “nothing to see here, guv’” reaction is patently silly. This not a backstreet kebab house we are talking about. To suggest, as Cat Rock does, that the deal needs to happen in order for Just Eat to compete with the might of “global tech companies” is at best a serious exaggeration, at worst plain nonsense.

Just Eat works with more than 100,000 restaurants worldwide. More than 27m people regularly order food through its smartphone app; £4.2bn of transactions last year. This is not a minnow threatened with extinction.

In the UK, it has more than 30,000 restaurants and takeaways on its books. It is estimated Uber Eats has a third of that. Deliveroo is growing rapidly but with global sales of £476m in 2018, it is still some way behind Just Eat, which posted turnover of £780m.

Amazon’s recent investment in Deliveroo may well be an attempt to enter the UK food delivery market by the backdoor, which is why the CMA is looking into it.

Meanwhile, Just Eat’s merger with Takeaway.com would create a titan of the food industry, processing 360m orders a year with a combined value of £6.6bn. That deserves further examination, too.

Branson’s Flybe duty

Has the Government been stung by all the criticism over its rescue of Flybe? Sajid Javid has told Michael O’leary that a tax holiday for the beleaguered airline does not breach EU state aid rules.

The Chancellor’s stance is that an agreement to defer air passenger duty (APD) is a “standard ‘Time to Pay’” arrangement of the sort that the taxman grants to hundreds of thousands of companies every year.

However, in a letter to Ryanair’s boss, seen by Sky News, there is no mention of a £100m Government loan that Flybe has reportedly asked for.

Without it, alternative sources of financing will be hard to come by.

However, there is one obvious option still available to the airline: its wealthy new backers, including Sir Richard Branson, could pump in the full amount needed themselves. Unless of course their faith in Flybe has already been broken?

‘This is not a backstreet kebab house, a minnow threatened with extinction’