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  Immediate release:  Tues 14th  Jan


  Friends of the Earth today urged the Government to ensure that
  Wal-Mart does not evade an investigation by Competition
  authorities into its bid to take over Safeway.  Speculation today
  suggests that the giant American company, which owns UK
  supermarket chain Asda, is hoping to reach agreement with the
  Office of Fair Trading that if it sells off enough stores the
  merger will be allowed to go ahead [1].

  The competition authorities are required to consider whether
  significant mergers of this type are against the public interest.
  Friends of the Earth is warning that even if Wal-Mart sells off
  enough stores to avoid a "monopoly", the deal will still be a nail
  in the coffin of many farmers and reduce consumer choice.  Farmers
  and other suppliers, consumer organisations, and independent shops
  are all likely to be effected by the deal and Friends of the Earth
  believes their views on this should be heard.

  The Competition Commission already has evidence of how Asda uses
  its power to bully suppliers.  Its investigation into supermarkets
  published in 2000 found that 18 Asda practices in dealing with
  suppliers adversely affected the public interest [2].  These
  included seeking discounts on agreed prices and seeking support
  from suppliers in matching lower retail prices offered by a
  competing retailer.  The Competition Commission concluded that
  such practices were likely to reduce product innovation by
  suppliers and so lead to lower quality and less consumer choice.
  The additional buying power that Asda/Wal-Mart would gain from the
  Safeway merger would further tip the balance of power from
  suppliers to big retailers.

  Friends of the Earth Food and Farming Campaigner Sandra Bell said:

  "  Ev  en if it sells off some stores,   Wal  -  M  art  's
  take  -  over of Safew  ay c  ould put   about   half of the UK's
  grocery market in the hands of just two very powerful corporate
  retailers.  This cannot be good news for consumers and would fl  y
  in the face of G  overnment commitments to support British farmers
  and small businesses.  There must be a thorough investigation of
  this merger with input from suppliers, consumer groups, and
  representatives of independent retailers  .  If this goes ahead,
  they will all lose out  .  "

  [1] Wal-Mart said it would be prepared to sell some UK stores to
  get the deal cleared by regulators.  And added that it would be
  making a submission to the Office of Fair Trading today to seek
  such clearance (Grocer 14/01/03).
  [2] Competition Commission (2000), Supermarkets, Volume 1, Table