WHILE THE proposed Musgrave Group takeover of Superquinn has been welcomed in some quarters, concern has been expressed that it will significantly reduce the amount of competition in the grocery sector and put more pressure on Irish suppliers.
Chief executive of the Consumers’ Association of Ireland Dermott Jewell said he was “a little bit concerned” by the takeover, which was announced yesterday morning, barely 12 hours after a release was issued on Superquinn’s behalf saying it was going into receivership.
“There will be a perception that there is still four major players operating in the Irish grocery sector, but the reality is, it will reduce the level of competition in the sector by 25 per cent overnight and will make it enormously difficult for new players to enter the market in the future,” Mr Jewell said.
He accepted the move was “positive in that jobs have been saved” and welcomed the fact one Irish company was being taken over by another, but he added that while no damage might be done to consumers’ interests in the short term, in the longer term “we will see less choice – that can only be bad news for most people”.
John Ruddy, editor of grocery trade publication Checkout, noted that Musgrave had said it would retain the Superquinn brand.
“I think that will be a positive move. Superquinn means something for consumers, particularly those on the east coast, and from a symbolic perspective and, from the perspective of offering choices and a different type of shopping environment, I think it is good that the brand will continue.”
It was “reassuring” the brand would stay in Irish hands, as the Musgrave Group would be more familiar with Irish suppliers, although he acknowledged many of those suppliers were deeply concerned about their exposure to debts left behind by the troubled company.
The Irish Small and Medium Enterprises Association was more than concerned, demanding the Government intervene to ensure small suppliers to Superquinn be paid for goods supplied before the banks sent in a receiver.
Mr Ruddy said the takeover would give the new group slightly more buying power and “a little more clout”, which could help Musgrave “drive harder bargains with suppliers and then pass on subsequent savings to consumers.
“Prices will have more scope to fall. I am not saying they will, but at least they have the scope to do that.”
He said he anticipated a “campaign of shock and awe” once the deal was done and Musgrave took control of Superquinn. He suggested that consumers could expect a campaign aimed at showing that the new owner was committed to making the brand great both in terms of the look and feel of the stores and the prices charged.
He accepted there might be a diminution of choice and it might have been better for consumers if an outside retailer had bought the business and sparked a price war, but, he added, “any new entrant might have simply adapted to the conditions here”.
