Keep Mccoll’s independent, regulator orders Morrisons

MORRISONS has been ordered by the mergers regulator to keep Mccoll’s independent, until it has ruled out competition concerns.

The Competition and Markets Authority (CMA) has launched an investigation into Morrisons’ deal to buy Mccoll’s, the convenience store chain, from administration and ordered the two companies to remain separate for the time being.

It said that it had “reasonable grounds” to suspect some of their assets may be too similar and that this could leave shoppers worse off.

However, the regulator is working with Morrisons to ensure the supermarket can support the ailing high street chain.

Morrisons had been supplying Mccoll’s 1,200 stores with groceries before it collapsed earlier this month under the weight of about £160m of debt. More than 200 Mccoll’s stores have also been converted to Morrisons Daily shops.

Morrisons paid £182m for the retailer after a battle with the billionaire Issa brothers, who own Asda.

It clinched the deal after it decided not to claim for its own debt owed by Mccoll’s, described as “very significant” by administrators at PWC. Some 16,000 jobs were saved and 2,000 pensioners’ pots protected following the rescue takeover.

Loss-making Mccoll’s struggled to recover from the demise of supplier Palmer & Harvey in 2018 and more recently was plagued by product shortages and supply chain disruption.

A CMA spokesman said: “We’re aware of the circumstances surrounding Morrisons buying Mccoll’s convenience stores.

“Now that the businesses have told us that they intend to submit the deal for our review, we will conduct our investigation as promptly as possible.

“We’ve worked closely with Morrisons to ensure that it can provide the support that Mccoll’s needs to continue to operate during our investigation.”

The CMA issued an initial enforcement order, which is standard practice where a deal has already been completed.

Morrisons declined to comment.