Politicians and shoppers in both islands worried about the impact on prices have condemned the controversial purchase as ‘opportunistic’ because it was announced hours before the new Competition Law came into effect here.
But CI Traders executive chairman Tom Scott said this morning: ‘I believe we have the interests of the islands at heart.’ The purchase from Wm Morrison was announced in the early hours of Saturday morning – 24 hours later and CI Traders may have been legally required to refer the deal to the Jersey Competition Regulatory Authority under the mergers and acquisitions rules designed to reduce the power of monopolies.
Senator Philip Ozouf – the principal politician behind the new law – has no doubt that the deal would have been notifiable under it.
And his frustration is compounded by the fact that without an administrative slip-up by the Privy Council in the UK – it was left off an agenda for ratification – the law would have come into force two months ago.
‘I warned people that this kind of thing might happen and that’s why I was so upset when it was delayed,’ he said.
Senator Ozouf this morning called a meeting attended by Policy and Resources president Senator Frank Walker, Finance and Economics president Senator Terry Le Sueur and Economic Development president Deputy Gerald Voisin.
They have asked the JCRA to fully investigate the transaction and particularly the timing of it to check whether it was actually fully completed by 1 May.
They have also asked for continued monitoring of prices at Safeway and Checkers.
Senator Ozouf says the deal is bad news for all Islanders and could affect the rate of inflation, which had been falling.
‘We know competition works and this is a narrowing of competition.
The evidence I have received from the recently completed retail study indicates what a beneficial effect Morrison’s was having on prices,’ he said.
He believes the move strengthens calls for a pan-Channel Islands competition regulator.
But Mr Scott says the deal is good news for the islands because it means the stores will come back under local ownership and will pay local taxes.
He also maintains that the stores, which will continue to trade under the Safeway brand, will compete on price with the company’s other retail stores, Checkers and Checkers Express.
