The UK competition regulator has warned Topp Tiles’ purchase of 30 rival shops could make prices more expensive and services worse.
On Monday the competition regulator the Competition and Market Authority (CMA) said the acquisition of CTD Tiles stores could lead to competition issues.
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Those competition issues could mean less choice, and worse deals and service. Topp Tiles is the largest specialist tile retailer in the UK and CTD Tiles was the second biggest before it collapsed into administration last year and was bought for £9m.
It meant Topp Tiles effectively bought its previous biggest competitor.
“Whether you’re retiling your own home or a business that provides renovation services, the merger could make such projects more expensive,” the CMA’s executive director for mergers Joel Bamford said.
Only parts of Britain, however, will be impacted by the deal, the CMA said.
The issues are confined to four areas of Scotland and England.
After reviewing the deal, by examining internal documents and evidence from customers and competitors, the CMA judged in most areas there are “sufficient” competitors to Topp Tiles.
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Home renovators and tradespeople in “a small number of sites” in Dorking, Edinburgh, Inverness and Aberdeen could see a reduction in competitive deals and product choice, it added.
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.”
What now?
Topps Tiles has until 24 February to offer solutions to the CMA’s concerns.
If no solutions are put forward the case will be investigated in more depth.
Political pressure
The regulator has come under government pressure in recent weeks to prioritise economic growth.
Both Prime Minister Keir Starmer and Chancellor Rachel Reeves wrote to regulators urging them to place expanding the economy at the heart of their missions.
Ms Reeves said in recent months post-financial crash regulation had “gone too far” while the prime minister pledged to get rid of regulation that “needlessly holds back investment”.
The CMA chair was removed last month by the Department for Business and Trade amid this push on regulators.