The UK’s competition authority has ruled that the acquisition of former Newcastle firm CTD Tiles could lead to competition issues in four areas of the country.
The Competition and Markets Authority (CMA) has issued a warning that Topps Tiles’ acquisition of 30 stores from CTD Tiles could see businesses and shoppers in three parts of Scotland, plus Dorking in Surrey, facing worse deals or service due to the reduction in competition.
Topps bought the stores for about £9m in August last year after CTD, which was the second largest specialist tile retailer in the UK behind Topps, fell into administration. That saw 56 shops and more than 250 job losses but the Topps deal saved part of the company.
The Competition and Markets Authority (CMA) said it received several complaints after the agreement was confirmed, including concerns over “how the deal impacted businesses and retail customers in specific areas of the country”. Following an initial phase 1 investigation, the CMA found specific competition concerns in Dorking, Edinburgh, Inverness and Aberdeen, where it believes the deal could lead to worse deals and service for customers.
Leicestershire-based firm Topps has until February 24 to submit proposals to allay the regulator’s concerns and avoid a potential, more thorough investigation.
Joel Bamford, executive director for mergers at the CMA, said: “Having looked at the evidence, we’re concerned Topps Tiles’ purchase of CTD Tiles may reduce competition in Dorking, Edinburgh, Inverness and Aberdeen. This loss of competition could lead to worse deals and service in those areas.
“Whether you’re retiling your own home or a business that provides renovation services, the merger could make such projects more expensive. Topps Tiles now has the opportunity to offer solutions to our concerns, otherwise this case will proceed to a more in-depth investigation.”
In a statement to the stock market, Topps said in response: “The company will continue to work with the CMA in a constructive and professional manner, as it has done throughout this process. A further announcement will be made in due course.”
Topps’ largest shareholder, MS Galleon, said the business had not identified concentration risk properly and faced “significant risk of remedies” from the deal.
