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Posts Tagged ‘Office of Fair Trading’

Pearson Cleared by OFT for Harcourt Education Acquisition

Pearson‘s acquisition of Harcourt Education in the UK has escaped a possible referral to the Competition Commission, according to the Bookseller. In a statement put out Friday, the Office of Fair Trading said it had decided, based “on the information currently available to it”, not to refer the completed merger to the Competition Commission. It did not go into further detail, but added that the text of the decision would be placed on the Office of Fair Trading’s web site at soon.

Pearson Education acquired Harcourt Education from Reed Elsevier in May for $950m. But the OFT announced in June that it was considering whether the deal would result in “a substantial lessening of competition” in the UK’s educational publishing market, forcing Pearson to put its integration plans on ice

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OFT Clears Advertising Guidelines for Bertelsmann Book Clubs

AFX reports that the UK’s Office of Fair Trading (OFT) said Bertelsmann-owned Book Club Associates (BCA), membership book clubs across the UK selling books online and by mail order, has given undertakings not to use misleading adverts when enticing customers to sign up for its book clubs, although it added that BCA refused to accept its previous ads had been misleading. The OFT said it considered a number of the claims made in BCA’s advertising have been misleading under advertisement regulations, and whilst BCA did not accept this, it has “agreed to work with the OFT to reach an outcome that will benefit consumers.”

The advertising must comply with the undertakings by July 24.

HP-18: Inquiry Into Price Wars

So what took so long for a UK MP to investigate the massive price wars going on between Tesco, Asda, and Waterstone’s, leaving the poor chains pretty much to fend for themselves (if they’ve elected not to stock HARRY POTTER AND THE DEATHLY HALLOWS at all?) But now, according to the Evening Standard, Conservative MP Charles Walker has called for an urgent inquiry into the prices supermarkets will charge, saying the price war would put huge pressure on independent retailers who cannot compete with the giants. “I’ve already written to the Office of Fair Trading to ask them to look into this but we need a full-scale investigation,” he said.

“A lot of small bookshops survive off the profits of just four or five blockbusters rather than a wide range of books, and here we have a situation where supermarkets are effectively selling books at a loss to get people in. That may promote literacy in the short term but it will force more book retailers into liquidation. This price war takes away the oxygen of economic survival from the smaller businesses, making it difficult to remain viable. The same can be said for small shops overshadowed by supermarket monsters.” But at this late juncture, I can’t see the OFT doing much about it, so on with the 60 percent-plus discounting at a supermarket near you!

OFT Confirms Investigation Into Pearson Acquisitions

The Bookseller reports this morning that the Office of Fair Trading has confirmed that Pearson has agreed to run Harcourt Education as a separate business until the conclusion of its investigation into the group’s purchase of the education unit previously owned by Reed Elsevier. John Fallon ,CEO of Pearson Education Asia, Europe, Middle East and Africa, said the group had anticipated the OFT’s interest: “We always knew that we would have to run the businesses separately until the OFT had time to look at the acquisition. The OFT enquiry is a matter of course in that, as Harcourt is the market leader in the UK, we fully expected that the OFT would want to look at the acquisition.”

OFT mulls Pearson’s Harcourt buy

The Bookseller’s Alison Bone reports that the Office of Fair Trading is considering whether Pearson Education‘s $950 million acquisition of Harcourt Education from Reed Elsevier will result in “a substantial lessening of competition” in the UK’s educational publishing market. The deal, unveiled in May, gives Pearson Education about 23% of the UK schools market, more than former market leaders Oxford University Press and Nelson Thornes.

The OFT is asking for representations from interested parties by 4th July. If it finds the deal has created a “relevant merger situation”, it will then consider whether the deal could “result in a substantial lessening of competition” in the UK, and if it should be referred to the Competition Commission for further investigation.

OFT Gets Going on Woolworths/Bertram Merger

Now that the Office of Fair Trading has referred the proposed merger between Woolworths and wholesaler Bertrams to its Competition Commission, Publishing News asks what happens next. Diana Guy, the Chair of the inquiry will oversee the process with the Commission members, usually four or five people drawn from different disciplines, but likely to include members with economic, legal and retail expertise. The 24-week process, with a possible extension of eight weeks, takes in five stages from information gathering to provisional findings to its final decision, may specify a timescale in which undertakings should be agreed or ordered, which will then be monitored by the OFT.

Woolworths issued a statement expressing, “disappointment” over the decision, while EUK MD Lloyd Wigglesworth maintained that the standard of service offered in the market would improve after a merger. He told PN: “We believe that consolidation between THE and Bertrams will enable the combined business to present a better, stronger and more sustainable offer to independent book retailers, which in turn will enhance their future business prospects.” The Board statement said: “Woolworths is disappointed that a referral is considered necessary but intends to co-operate fully with the Competition Commission’s inquiry, with the objective of obtaining a satisfactory outcome.”

WHSmith eyes Borders Airport Stores

What with Borders‘ recent announcement that it will shutter all of its UK-based shops, <em>the Scotsman reports that WHSmith has its eye on the airport shops even as he market awaits a bid from retail entrepreneur Tim Waterstone for the whole group. City analysts say that although the Office of Fair Trading would block any move for Borders outright from WH Smith, its airport shops are a licence to print money and chief executive Kate Swann will be interested. Nick Bubb, retail analyst at Pali International, said: “WH Smith will definitely be looking at part of it, especially the airport stores and possibly the out-of-town stores. I would be surprised if they are not trawling over it [Borders] this weekend.”

As for Waterstone, he’s in talks with Mothercare to sell his Early Learning Centre toy chain for an estimated 85 million pounds, which might then be used to try buying out Borders – or at least, try something along those lines, even if Seymour Pierce analyst Richard Ratner dismissed the notion as “wishful thinking”.