THE PURCHASE of a farming wholesaler, which owns a shop near Thornbury, could push up prices or lower quality, a government agency has said.

The Competition and Markets Authority (CMA) say that Mole Valley’s purchase of the retail arm of Countrywide Farmers could reduce competition, which potentially could pose a threat to customers in a total of 45 areas.

Both businesses each run country stores, with Countrywide based in both Thornbury and Cirencester, operating a total of 99 premises primarily located across the South and West of England.

Most of the business concerns the supply of bulk agricultural products, such as fertiliser or fencing - with a retail business in which they sell a wide range of products including animal feed, clothing, pet food and gardening tools.

The companies are two of the largest suppliers of agricultural products in bulk, and there are no or few other suppliers physically located in these 45 areas.

CMA’s investigation found that, while the businesses face competition from other suppliers that operate without local premises, many customers prefer to be able to buy products directly from a supplier’s store.

They say, therefore, these alternative suppliers may not provide enough competition to stop customers from losing out after the merger.

The CMA also found that the companies’ retail businesses compete closely, resulting in reduced competition for customers in 25 of the 45 local areas after the merger.

Its investigation found that there would be either no or very few competing country stores in these local areas as, while the companies’ retail businesses face competition for some products from suppliers specialising in one type of product (such as DIY stores, garden centres or pet food suppliers), many customers value being able to buy a range of items in one place. Therefore, these specialist suppliers may not provide enough competition to stop customers from losing out after the merger.

Mole Valley now has the opportunity to offer ways to address these competition concerns and if they do not make such an offer, or if any undertakings do not sufficiently address the CMA’s concerns, the merger will be referred for in-depth investigation through a ‘phase two’ inquiry.

Rachel Merelie, acting executive director of mergers and markets and the decision maker in this case, said: “It’s our job to make sure that people continue to have enough choice, get fair prices and good quality products after companies merge.

“Mole Valley and Countrywide Farmers are two of the biggest operators of country stores, and so it’s important that their customers can find good deals when they need to buy these kinds of products.”

Mole Valley have been approached for comment.