On March 17, 2011, the UK Office of Fair Trading (OFT) and Competition Commission (CC) published a joint commentary on retail mergers. This will be of interest to anybody who deals with a merger in this area, in whatever jurisdiction this takes place.
The commentary considers the issues raised in the various retail cases examined by the two authorities over the last seven years. It covers a broad range of cases, including mergers of: mobile phone outlets, bookshops, DIY stores, opticians and specialist food shops. It 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:
- Local catchment area for retail outlets.
- Extent to which competition takes place at the local and national levels.
- Techniques used to assess how mergers might affect retail prices.