The UK Competition and Markets Authority (CMA) has concluded its Phase 1 investigation into Morrisons’ proposed £190 million merger acquisition of McColl’s and has found that the merger raises competition concerns in 35 areas.

The authority concludes that McColl’s or MFG convenience stores will face reduced competition if the deal is allowed to go ahead as planned.

Weaker competition could lead to higher prices or a lower quality service for the customers in these areas who rely on their local shops for groceries, it said.

Morrisons now has five working days to offer proposals to the CMA to address the competition concerns identified. The CMA would then have a further five working days to consider whether to accept these in principle instead of referring the case to a Phase 2 investigation.

The CMA launched its Phase 1 investigation on 13 July, stating it had reasonable basis to suspect that the acquisition would have meant that WM Morrison Supermarkets Limited had ceased to be distinct from certain assets of McColl's Retail Group.

At the time, the CMA said it was ‘seeking to determine whether it is or may be the case that a relevant merger situation has been created and whether the creation of that situation has resulted or may be expected to result in a substantial lessening of competition in any market or markets in the UK’.

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