THE European Commission yesterday cleared Tesco's £630 million sterling acquisition of Quinnsworth, Stewarts and Crazy Prices, but stressed the commitments given by the British supermarket giant to continue buying from Irish suppliers.
The Government said Tesco had agreed an "action plan" for the Republic, which would deepen the company's roots in the Irish market.
"The Commission considered that current and potential competition in the Irish retail sector will not allow the combination of Tesco's buying power, and Associated British Foods' position as established market leader, to result in a dominant position in Ireland or Northern Ireland," the Commission said in a statement.
The acquisition would not lead to any immediate enhancement of market shares, the statement added, because Tesco had no significant presence anywhere in Ireland and was buying an interest which was already established, both in the Republic and in Northern Ireland.
"The Commission also examined the significant changes that Tesco's entry will bring about in the grocery sector in Ireland, which are likely to structurally modify the way in which suppliers, traders and retailers have been traditionally operating," the statement added.
"In this respect, the Commission has taken note of certain undertakings given by Tesco to the Irish Government about how it plans to organise its activities and, in particular, about the relationship it will have with Irish suppliers."
Analysts said that, while this did not mean the commitments given by Tesco were now legally binding, any departure from them would likely be characterised as a breach of faith.
Fianna Fail, whose deputy leader Ms Mary O'Rourke travelled to Brussels last month to urge the Commissioner, Mr Karel van Miert, to seek written assurances from Tesco, last night welcomed the decision, saying that the Commission had, in effect, stitched in conditions on the approval.
"The decision by the EU Commissioner now makes it impossible for Tesco to renege on commitments given," Ms O'Rourke said. She also called on ABF to give a bonus to Quinnsworth and Crairy Prices staff from the proceeds of the sale to Tesco.
The Minister for Enterprise and Employment, Mr Bruton, said he was happy the Commission had cleared the deal and was confident that Tesco would honour its undertakings to him.
These included preserving the terms and conditions of current employees, keeping a buying facility in Ireland and maintaining the same level of goods supplied from within Ireland.
