Watchdog clears Spar owner’s takeover of rival supplier

The competition watchdog has approved Spar and Eurospar owner BWG Foods’ proposed takeover of a wholesale supplier to rival convenience store chain Gala subject to “binding commitments” to address questions around access to commercially sensitive information.

In a statement on Friday, the Competition and Consumer Protection Commission (CCPC) said it had concluded that the proposed acquisition of Tuffy Wholesale “will not substantially lessen competition”. However, over the course of its investigation, the watchdog identified a number of “potential concerns” which it outlined to the parties.

Along with other cash and carry and retail businesses, Tuffy Wholesale holds a stake in both Gala Retail Services – to which it also supplies goods – and wholesale group Stonehouse. The CCPC said it was concerned that “through BWG’s ownership of Tuffy Wholesale, BWG, could potentially obtain access to commercially sensitive information” relating to Gala and Stonehouse.

To address these concerns, the watchdog said that BWG had proposed “a number of binding commitments”, including that BWG would “divest fully Tuffy’s shareholdings” in the two groups.

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It said: “The CCPC took the commitment into account in the determination and the commitments form part of the basis of the CCPC’s determination to clear the proposed acquisition, and so are legally binding on BWG.”

A spokesman for BWG Foods told The Irish Times that the group is “pleased to have completed the acquisition”. He said: “The business has built a very strong presence across the West of Ireland over many years and its customer base complements our existing operations across that region. It will enhance the long-term growth of our combined wholesale and retail business and the services we provide to our customers.”

[ Shoppers spend €1.6bn in Spar stores as group plots expansion ]

With bases in Clare and Sligo, Tuffy Wholesale serves the largest number of Gala stores in the country. The group generated turnover of close to €47.8 million in the year to the end of March 2022, according to its most recent set of accounts, and reported operating profits of close to €1.2 million.

Owned by the South African Spar Group, BWG has now acquired three wholesaler members of the Gala franchise network in recent years following deals for the midlands-based 4 Aces Wholesale in 2018 and McCarrick Brothers Wholesale in Longford in 2022. Both acquisitions were subject to similar legally binding commitments to divest shareholdings in Gala and Stonehouse.