The UK competition regulator has issued a warning regarding Topp Tiles’ acquisition of 30 rival shops, stating that it could result in higher prices and poorer services.
On Monday, the Competition and Markets Authority (CMA) raised concerns about the purchase of CTD Tiles stores and its potential impact on competition.
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The competition issues identified could lead to reduced choices, less favorable deals, and a decline in service quality. Topp Tiles, the largest specialist tile retailer in the UK, acquired CTD Tiles, the second-largest, after the latter went into administration and was purchased for £9m.
This acquisition effectively eliminated Topp Tiles’ main competitor.
«Whether you are renovating your own home or managing a business that offers renovation services, this merger could result in increased costs for such projects,» stated Joel Bamford, the CMA’s executive director for mergers.
The impact of the deal is expected to be limited to specific regions in Scotland and England.
The concerns are concentrated in four areas of the mentioned regions.
Following a thorough review of the deal, analyzing internal documents and feedback from customers and competitors, the CMA concluded that in most areas, there are sufficient competitors to Topp Tiles.
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Customers and tradespeople in «a small number of sites» in Dorking, Edinburgh, Inverness, and Aberdeen may experience a decrease in competitive offerings and product variety, according to the CMA.
In response to the findings, Topps stated: «The company will continue to collaborate with the CMA in a constructive and professional manner, as it has done throughout this process.
«Further updates will be provided in due course.»
What now?
Topps Tiles has until 24 February to propose solutions to address the CMA’s concerns.
If no resolutions are presented, the case will undergo further scrutiny.
Political pressure
In recent weeks, the regulator has faced pressure from the government to prioritize economic growth.
Both Prime Minister Keir Starmer and Chancellor Rachel Reeves wrote to regulators urging them to focus on expanding the economy as a central objective.
Ms Reeves expressed that post-financial crash regulations had «gone too far» in recent months, while the prime minister vowed to eliminate regulations that «unnecessarily hinder investment».
The CMA chair was removed by the Department for Business and Trade last month amidst this push for regulatory changes.