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    Suppliers Try to Halt Sale of Jacksons Stores to Sainsbury

    Fear of consolidation in the U.K. market spurs opposition.

    UNITED KINGDOM -- A leading supplier to Jacksons Stores has called on the British government to block the £100 million sale of the convenience store chain to supermarket chain J Sainsbury, reported the Times Online.

    Nisa-Today's, Britain's largest buying group, which supplied Jacksons Stores with the vast majority of its fresh produce, has backed growing opposition to the deal. Over the past 12 months, three members of Nisa-Today's have been acquired by Tesco, Sainsbury and the Co-op.

    Competition rules distinguish between supermarkets and convenience stores, which has allowed Tesco and Sainsbury to buy up a number of convenience chains -- despite what is in effect a bar on mergers in the supermarket sector. In the past two years, Tesco has acquired 6 percent of the convenience market, according to the Telegraph.

    Neil Turton at Nisa-Today's said, "We need to stop a homogenous shopping experience developing. The Office of Fair Trading has helped to create this situation. It needs to radically review its definition of the grocery market."

    David Rae, who heads the Association of Convenience Stores, a trade body representing 30,000 stores, called for the government to intervene. "The multiples are moving unfettered into the convenience-stores sector. The [Department of Trade and Industry] has to wake up and see what is happening," he said.

    A spokeswoman for Sainsbury rejected the concerns. "Even after the Jacksons deal, we have less than 2 percent of the convenience market," she said.

    The 114-store Jacksons chain, concentrated in Yorkshire and the Midlands, will be rebranded "Sainsbury's at Jacksons." The existing management will continue to run the stores. The acquisition will double Sainsbury's share of the booming convenience store market, valued at approximately £23 billion a year and expected to grow to nearly £30 billion by 2009.

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