Tag Archives | Musgraves

Some thoughts on the proposed Musgraves acquisition of Superquinn

Yesterday I wrote a follow up to some tweets on Tuesday morning regarding the proposed acquisition of Superquinn by Musgraves.

I think this is going to be an interesting proposition for the Competition Authority, and the government. It could also give us great insight into how the future super-quango combination of the Competition Authority and the National Consumer Agency will operate.

While the Competition Authority will make the decision on the acquisition, it’s the National Consumer Agency at the moment who have all the information on pricing across the grocery market.

I personally don’t think that allowing the acquisition to go ahead will be good for Irish consumers.

I tweeted a few times yesterday morning about how the Competition Authority might handle the competition issues arising from the proposed purchase by Musgraves of Superquinn. From an employment perspective, it’s obviously important that as many of the 2,800 jobs are saved. However, jobs are not the responsibility of The Competition Authority.

Purely within the remit of TCA is the fact that competition in the Irish grocery market would be seriously diminished if Musgraves was allowed become the number 1 player via this acquisition. On average, according to the NCA, Supervalu (owned by Musgraves) is €9 more expensive for a basket of groceries than Superquinn, which is €3 more expensive than Dunned and Tesco. Allowing for the fact that the Superquinn outlets under Musgraves are likely to be priced at least as expensive as Supervalu, this takeover will only be bad for consumers.

It is, however, quite likely that Musgraves will play up on the more upscale image that the Superquinn brand has. And with the fact that the group will be the leading market player now, it’s quite possible that the prices in Superquinn could be increased beyond the prices in Supervalu – potentially even worse for consumers.

I’m particularly interested in seeing how TCA will approach this takeover. In the UK, competition laws were set aside to save banks through takeovers. Given political pressure, this could be demanded here also. Alternatively, TCA could just ignore the whole issue as a tactic to allow the acquisition to happen by default – blissfully ignoring all competition laws and duties as the did with the Topaz takeover of Statoil in 2006.  This will be the more likely action – political pressures will be satisfied, jobs will be saved, and no one has to do anything. Except the Irish consumer, again, who’ll be left to foot the bill.

Here’s the start of the political pressure anyway, from Willie O’Dea in the Dail yesterday:

I seek the adjournment of the Dáil underStanding Order 32 to raise a matter of national importance, namely, the sale of Superquinn to the Musgrave retail group, the competition issues that may arise from this agreement, the potential impact on the grocery sector across the country, the potential impact on the 2,800 workers employed by Superquinn and the need for the Minister for Jobs, Enterprise and Innovation to make this a matter of priority.


Consumers Association Chief Executive advocates buying British, not Irish

I had to read this recent story in the Evening Herald, Lidl bargain sets Irish stores meaty challenge, a few times before I could finally grasp what was going on.

First of all, I couldn’t understand how the Consumers Association of Ireland would be so desperate for newspaper coverage (measured monthly as a KPI for the organisation) that they’d be quoted welcoming the introduction of a new bargain price “roast dinner selection” to Lidl outlets throughout the country.

Then we discover that the welcomed new bargain meal is actually a product of the United Kingdom, and Mr. Jewell expects there to be queues of shoppers down the street waiting to buy a roast dinner for €1.99.

I can’t imagine the CAI deputy chairman, Michael Kilcoyne, would have been be too happy to hear about Mr. Jewells comments, particularly as only that week he had to deal with 140 of his union members in Galway losing their jobs at the Irish wholesaler Musgraves, suppliers to many competitors of Lidl.

I suppose it’s the perennial problem for Irish consumers. Do you buy Irish, frequently at a higher price, with the aim of supporting Irish businesses and industry, or do you follow the price and buy the cheapest products possible?


Powered by WordPress. Designed by WooThemes

hit counter