Tag Archives: CMA

Country Stores Merger Could Reduce Competition

The CMA has found that Mole Valley’s purchase of the retail arm of Countrywide Farmers could push up prices or lower quality in 45 local areas



Mole Valley and Countrywide Farmers each run country stores, operating a total of 99 premises primarily located across the South and West of England. These typically each have a bulk agricultural products supply business – through which they sell large-scale supplies of agricultural products, such as fertiliser or fencing – and a retail business, through which they sell a wide range of products including animal feed, clothing, pet food and gardening tools.

The Competition and Markets Authority (CMA) is investigating Mole Valley’s proposed purchase of 48 Countrywide Farmers’ outlets, and has identified competition concerns in a total of 45 local areas. This involves both their bulk agricultural and retail businesses.

The companies are two of the largest suppliers of agricultural products in bulk, and there are no or few other suppliers physically located in these 45 areas. The CMA’s investigation found that, while the 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.

Therefore, these alternative suppliers may not provide enough competition to stop customers from losing out after the merger. The CMA’s investigation found that competition concerns in the supply of agricultural products in bulk arise in 45 local areas in total.

The CMA also found that the companies’ retail businesses compete closely, resulting in reduced competition for customers in 25 of the 45 local areas after the merger. Its investigation found that there would be either no or very few competing country stores in these local areas as, while the companies’ retail businesses face competition for some products from suppliers specialising in one type of product (such as DIY stores, garden centres or pet food suppliers), many customers value being able to buy a range of items in one place. Therefore, these specialist suppliers may not provide enough competition to stop customers from losing out after the merger.

Mole Valley now has the opportunity to offer ways to address these competition concerns. If Mole Valley does not make such an offer, or if any undertakings do not sufficiently address the CMA’s concerns, the merger will be referred for in-depth investigation through a ‘phase 2’ inquiry.

Rachel Merelie, Acting Executive Director of Mergers and Markets and the decision maker in this case, said:

It’s our job to make sure that people continue to have enough choice, get fair prices and good quality products after companies merge. Mole Valley and Countrywide Farmers are two of the biggest operators of country stores, and so it’s important that their customers can find good deals when they need to buy these kinds of products.

Electro Rent / Microlease Merger Could Reduce Competition

The CMA has provisionally found Electro Rent’s purchase of Microlease is likely to lead to a worse deal for renters of testing and measurement equipment

Test Equipment

Test Equipment

Both companies rent, lease and sell equipment that tests and measures the performance of electronic devices used in certain industries such as telecommunications, defence, utilities and information technology.

The completed merger of the rival businesses was referred to a group of independent panel members at the Competition and Markets Authority (CMA) for an in-depth investigation, after an initial investigation identified competition concerns.

The group has found that Electro Rent, though significantly smaller than Microlease in the UK, was the only other rental company operating in the country to have the resources and stock to compete effectively with Microlease.

It also determined that, while there is a limited number of alternatives, the merged business is now the only suitable UK supplier for a large number of customers.

It is unlikely that the merged business would be prevented from using its position to increase prices or reduce its quality of service to customers by new entrants or expansion of established companies.

The group has therefore provisionally concluded that it is likely the merger will lead to a substantial lessening of competition in the sector, and a worse deal for UK customers.

The CMA is now inviting comments on both its provisional findings and its possible remedies, which include selling part or all of one of the merged companies. See the case page for more information.

The CMA’s final report will be published by the statutory deadline of 4 April 2018.

New Overdraft Alerts As CMA Banking Rules Come Into Force

Banks will be required to warn people before they slip into overdraft as a result of new rules coming into force today

Competition and Markets Authority (CMA)

Competition and Markets Authority (CMA)

In a rule change required by the Competition and Markets Authority (CMA) as part of its Retail Banking Investigation, banks must now set up an alert system which will help their customers avoid unnecessary charges.

During its investigation, the CMA found that banks receive around £1.2 billion a year from unarranged overdraft charges. This new overdraft measure, combined with the CMA’s recent order to require banks to publicly announce their maximum monthly charges, could create significant savings for many bank customers.

A number of banks already have alert systems in place, but the new rules require all banks to send these alerts – through texts or a mobile banking app – and to implement other measures, such as a grace period in which people can transfer money into their account to avoid being charged.

The system will apply to new customers from today and will roll out to all existing bank customers over the coming month.

Adam Land, Senior Director at the CMA, said:

People will now be told when they are about to slip into overdraft, which could help them avoid potentially costly charges. And the changes we are requiring from today make it easier for small firms to switch to another bank for their current account or to obtain a loan.

These new rules, which are a result of our recent retail banking investigation, are part of a wider package that will help people to get the most out of their banks and force them to work harder for their customers’ money. The overdraft alert system is one of 4 new measures that are being implemented today to improve the service people receive and make it easier to switch between different banks.

At the moment, only 3% of personal and 4% of business customers switch to a different bank in any year, even though personal customers in Great Britain could typically save £92 per year by switching. Small firms, which benefit from 3 of the new measures being introduced, could realise savings of around £80 a year on average.

Opening Business Current Accounts

In its investigation, the CMA found each bank is asking for different information from businesses applying to open current accounts. This has encouraged many small businesses to use their existing Personal Current Account (PCA) provider for their business account and has discouraged them from switching between banks. The CMA is therefore insisting that Business Current Account (BCA) opening procedures are standardised, so all banks will now ask for the same information from applicants.

Loan price and eligibility tool

Small and medium sized businesses will also now find it easier to take out a business loan thanks to a new loan price and eligibility tool to be launched by four banks: RBS Group, Lloyds Banking Group, HSBC Group and Barclays. This tool will help SMEs to understand the costs of taking out a loan and find the best deal for them.

Transaction history

Banks will now also have to provide personal and business customers who are closing their account with five years of transaction history, free of charge, unless they choose to opt out. This move aims to encourage switching, as the CMA has found that the fear of losing your transaction history can be a reason people don’t switch. It also means people will have easy access to their financial records for things like mortgage applications.

Gambling Sector Told To Raise Its Game After CMA Action

Following a CMA investigation, gambling firms must now stop unfair online promotions that trap players’ money

Online Poker

Online Poker

As part of a major overhaul of how the gambling industry operates online, three leading operators – Ladbrokes, William Hill, and PT Entertainment – have formally committed to change the way they offer bonus promotions to ensure players can always access and release their own money.

These landmark changes must now be adopted across the sector. Firms not doing so will face regulatory action from the Gambling Commission. The Competition and Markets Authority (CMA) and the Gambling Commission have been working in collaboration to improve conditions for players gambling online.

The changes come in response to an investigation by the CMA to make sure the sector was not breaking consumer protection law, and mean players can be sure they can withdraw their own money when they play as part of a bonus promotion.

The firms involved have also agreed to be more upfront and clear in the terms and conditions of their bonus promotions. In particular, the changes mean:

  • Players won’t be required to play multiple times before they can withdraw their own money
  • Gambling firms must ensure that any restrictions on gameplay are made clear to players, and cannot rely on vague terms to confiscate players’ money
  • Gambling firms must not oblige players to take part in publicity

The promotions under particular scrutiny are designed to attract players onto casino-like gaming websites by offering bonus funds when players put in their own money. The CMA found that certain terms in these promotions were likely to be ‘unfair’, in breach of consumer protection law, and could mislead consumers. There was particular concern people could be made to play for longer than they had bargained for before being able to withdraw their own money.

These problems were found to be common across the £4.7 billion online gambling sector and in October 2016 the CMA launched an investigation, in collaboration with the Gambling Commission, to tackle the shared concern around transparency and fairness.

The Gambling Commission has made clear that firms across the whole sector must promptly adopt similar changes to address the concerns identified.

George Lusty, Project Director, said:

Gambling always carries a risk, but players should never face unfair restrictions that prevent them from getting at their money. Firms mustn’t stack the odds against players, by putting unfair obstacles in their way, or making it difficult for them to stop gambling when they want to.

The CMA is here to make sure businesses’ terms and practices are fair for their customers. We welcome the commitment from these leading firms to address the problems our investigation uncovered, by making important changes to their terms and conditions.

We now expect others to follow, and look forward to the Gambling Commission’s continued work to make sure all operators in this sector play fair with their customers’ money.

Gambling Commission Executive Director, Sarah Gardner, said:

We back the action taken by the CMA today. Gambling firms must treat their customers fairly and not attach unreasonable terms and conditions to their promotions and offers.

We expect all Gambling Commission licensed businesses to immediately review the promotions and sign up deals they offer customers and take whatever steps they need to take, to the same timescales agreed by the three operators, to ensure they comply.

Operators should be very aware that we will continue to work closely with the CMA to ensure customers are getting a fair deal across the gambling industry.

Further enforcement activity by the CMA in the sector is ongoing. The CMAwill continue to look at obstacles facing customers trying to withdraw their money after gambling online – whether as part of a promotion or not.

This includes considering terms that force players to withdraw prize money in small instalments over a long period of time, and terms which allow firms to confiscate funds if they haven’t been played with for a few months.

David Currie’s Speech To The CMA Board Reception In Scotland

Speech given by CMA Chairman, David Currie, at the CMA's Scotland office in Edinburgh

David Currie

David Currie

I am very pleased to be able to welcome you all here tonight. This is the CMA Board’s third visit to Scotland and we have all benefited from the trip, as we have on the previous occasions we came to Edinburgh. I will speak in a minute about what we took from the discussions we’ve had this afternoon, which I know many of you attended. I would like first to reflect on what has occurred since our last visit back in November 2015. For a start, we have a new Chief Executive in Andrea Coscelli, who has taken the helm at an important point in the CMA’s history. We have completed two very substantial market investigations into energy and banking and conducted important market studies in Digital Comparison Tools and Care Homes. We have stepped up our enforcement of consumer and competition law – penalising those who break the law and securing better protections for consumers. More about this later.

And the other big change affecting us is that the UK voted to leave the European Union. While the CMA doesn’t have an opinion on the merits or otherwise of EU Exit, we are determined to help ensure markets continue to work well for consumers, businesses and the economy. EU Exit is likely to result in a bigger role for the CMA, and throws up some complex challenges as we prepare for the transition. The other change on the horizon is the expansion of our office here in Scotland. This will allow us to have a wider range of professions based in Edinburgh engaging more closely with Scottish issues. It will mean additional staff working out of a larger office in Edinburgh. It will allow us to tap into new markets of talent, partner with others more effectively, and deliver on the CMA’s commitment to being devolution aware across its functions. I’m really excited about the opportunity that this will create not just in Scotland but for the CMA as an organisation.

As you know, a main focus of the CMA, during the period that I have been Chair – which is coming, sadly, to an end – has been on strengthening our work in all the Devolved Nations and, more recently, across the English regions too. The CMA’s devolved nations representatives, based across the cities of Belfast, Cardiff and here in Edinburgh, are key to ensuring that as an organisation we are able to gather insight and understanding of the particular circumstances of each nation.

Sheila and her team here in Edinburgh work hard to enable the full and effective contribution of Scottish stakeholders in the CMA’s work. We are also creating the position of Director for Scotland and UK Nations to reflect the CMA’s ambition and determination going forward.

These insights have been important to some of our more recent work, such as the market study on Care homes, which highlighted the unfair charges and practices affecting some of our most vulnerable consumers. We engaged throughout with the Scottish care industry, COSLA, the Scottish Government and consumer groups to ensure we understood the issues as they relate to Scotland. Important for the NHS here and elsewhere are a number of cases we are taking, investigating potentially anti-competitive agreements and concerted practices in relation to generic pharmaceutical products. This has already resulted in a record fine of £84.2 million to pharmaceutical manufacturer Pfizer and £5.2 million to distributor Flynn. In a different sector, we took action, which was upheld at appeal, against Aberdeen-based Balmoral tanks after the company breached competition law by exchanging competitively-sensitive information on prices and pricing intentions. We have also investigated a number of significant mergers: after careful consideration, we approved the merger of Tesco and Booker, we cleared the Standard Life/Aberdeen asset management merger, creating Europe’s second largest fund manager; and also gave the go-ahead to Wood Group in its merger with Amec Foster Wheeler. All important mergers for Scotland. Overall, the last few years have been very busy and 2018 will be no exception.

In this context, the CMA team here in Scotland have been very active in the past year. They ran a series of well attended seminars: with Board member Michael Grenfell presenting on enforcement last January, our Senior Director, Consumer, Nisha Arora, talking on vulnerable consumers and Project Director, Will Hayter, explaining the CMA’s work on digital comparison tools. The team has also been involved in policy discussions on a range of issues as diverse as: district heating, bus policy, the collaborative economy, Scotland’s economic productivity, consumer policy and legal services. We feel that we do get a clear sense of Scottish priorities from working with the business, regulatory and consumer communities – and indeed, from politicians here. However, we accept that there is always room for improvement and tonight is an opportunity for you to talk to us about what more we can do to ensure the Scottish voice is heard.

I’d like now to turn to the very rich discussions we have had with stakeholders this afternoon. We held a number of useful meetings, with the Cabinet Secretary for Economy, Jobs and Fair Work, with Scottish Environment Protection Agency, Edinburgh University and the NHS National Services Scotland. We also had two roundtables: one with colleagues from the regulatory community in Scotland and one on the topic of EU exit. All of these meetings gave Board members invaluable insights on the challenges and opportunities facing Scotland now and in the immediate future, which will help inform our work as a competition authority.

Sadly, this will be my final visit to Edinburgh as Chairman of the CMA, but I expect to visit again in my new role of chair for the Advertising Standards Agency. I’ve had the pleasure of meeting and working with many of you over the last six years and I would like to take the opportunity to thank everyone for their support during my tenure.

Finally, I am delighted we are joined this evening by Keith Brown, Cabinet Secretary for Economy, Jobs and Fair work. The CMA has an important role advising government on how best to harness competition to achieve policy and economic goals, and there are a number of areas where we look forward to engaging with the Scottish Government. It is also working on developing its consumer and competition policy, a theme in which we are of course very interested. We look forward to working with Keith and the Scottish Government this year.

I’d now very much like to welcome the Cabinet Secretary for the Economy, jobs and fair work to say a few words.

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