Scrutinises property acquisition by NorgesGruppen
The Norwegian Competition Authority scrutinises the acquisition by NorgesGruppen (NG) of a property in Bergen where Coop Norway holds the lease.
After Norway’s largest grocery chain acquired the property on March 1st, Coop has once again become a tenant of their largest competitor, writes the newspaper Nasjonen. From before, Coop Norway hires three stores which are owned by the NorgesGruppen (the Norwegian group), in addition to one which is owned 50 per cent by said competitor.
Coop views the last property purchase, in Sædalen in Bergen, in conjunction with the competition situation in the grocery industry, and presents the acquisition as an example of «targeted acquisitions of retail premises in order to strengthen NG’s market position».
«After the expiry of the current rental period, NG will probably not extend the agreement, but instead, expand its already very extensive retail network. This will lead to further strengthening NG’s position in the grocery market, which could weaken Coop’s competitiveness», writes the Legal Manager in Coop Norway, Knut Kjøsnes, in an email to the Norwegian Competition Authority.
Norgesgruppen has, among other things, secured the right to take over the rental when Coop’s rental period expires or the outlet is closed down.
« NorgesGruppen confirms that there is a fierce competition between the players in the grocery market, also in terms of the acquisition of locations. NorgesGruppen experience that our competitors take over leases on stores that we have held for a long time, as well», writes the Manager of Business Policy and Authority Contact in NorgesGruppen, Bård Gultvedt.
The Norwegian Competition Authority may require Norgesgruppen to provide more detailed information regarding the purchase. Beate Milford Berrefjord, who works for the authority, emphasizes that it is not unproblematic that a grocery chain owns the premises that are rented by a competitor.
– It is not without importance who controls the properties, says Berrefjord.
© NTB scanpix / #Norway Today