Office of Fair Trading director-general John Vickers has declared a potential conflict of interest between his adjudicative role and the current affray surrounding the future of Britain’s fourth largest supermarket chain Safeway.
In the battle for Safeway, the OFT will decide whether to refer any (or all) of the bids to the Competition Commission for a full assessment and final judgement.
Vickers has accordingly withdrawn from the proceedings, citing as his reason consultancy assignments he carried out for certain supermarkets some years ago while still a professor of economics at Oxford University.
Currently there is only one firm bidder for Safeway, the originator of the free-for-all William Morrison, number five in the UK supermarket league, whose bid was recommended to shareholders by the Safeway board before it withdrew that guidance last week [WAMN: 24-Jan-03].
There are now at least six other keenly interested parties all of whom have formally declared their interest: J Sainsbury, Wal-Mart/Asda, US private investment group Kohlberg Kravis Roberts, retail tycoon Philip Green, and UK number one supermarketeer Tesco. Another US investment group, Texas Pacific, is said to be prowling the perimeter.
The supermarket interests are believed to be holding back from a formal bid until they know which way the OFT will jump. The money-men are procrastinating for the same reason – as a rejection of any of the ‘big three’ supermarkets on competition ground will present them with the opportunity to carve-up and auction Safeway piecemeal to the greedy grocers.
Data sourced from: Financial Times; additional content by WARC staff