How did the competition commission tame the supermarket giants :: Business and Management Studies

How did the competition commission tame the super securities industry giantsThe Competition instruction is an independent popular body establishedby the Competition Act 1998. The Competition instruction conductsin-depth inquiries into blend inrs, markets and the regulation of themajor regulated industries, downstairstaken in response to a case madeto it by another authority. The Commission recently had the task ofhaving the agent to give one major supermarket chain the go ahead tomerge with Safeway. The proposed science of Safeway by Morrisons,Asda, Tesco or Sainsburys was referred to the Competitive Commissionunder the Fair Trading Act by the Trade and Industry Secretary. TheCommission can consider the opinions of all parties in determiningwhether any of the potentiality mergers is against the in the public eye(predicate) interest.Topics for inclusion in the meeting could include both(prenominal) topical anesthetic andnational issues, including the effect on consumers an d suppliers ofany proposed acquisition. The Competition Commission gave Morrisonsthe green light over the other potential buyers such as Asda, Tescoand Sainsburys. This was due to a number of economic reasons. Althoughneither Safeway nor Morrisons was struggling, both agreed the need tomerge was very advantageous. Morrisons was looking for a way to growfar more quickly, and could afford to fund an acquisition to achievethat goal as soon as possible.The successful conjure up for Morrisons to take over Safeway would mean thatMorrisons would become a major and strong national player. The mergeshould exert a validatory and competitive effect on retail insupermarkets and also bring in the customers. Some people found theMorrisons bid to be against the public interest in particular localareas where the number of competing supermarkets would be reduced.However, opened to divestment of particular stores in these areas.Morrisons bid for Safeway was allowed to proceed. The CompetitionComm ission was given(p) just over quadruplet and a half months to investigatethe four merger situations. All of these needed to be assessed as totheir likely encroachment on competition. Mainly in terms of which would bethe most operable to economy. The decision was partly mad byundertaking isochrone analysis, which is mapping and stead ofstores area by area and the customers they serve. This provideddetailed information on which areas would be affected as a result ofreduced local competition.Morrisons the medium-sized but very fast-growing British supermarketchain takeover of UK tally Safeway deal was worth 2.9bn.The combinedfirm, with 598 stores, a turnover of 12.6bn and a market share of 16%,aims to be able to compete with Asda, Sainsbury and Tesco, the giantsof the UK supermarket sector. Both Morrisons and Safeway have been