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Mole Valley and Countrywide Farmers each run country stores, operating a total of 99 premises primarily located across the South and West of England. These typically each have a bulk agricultural products supply business – through which they sell large-scale supplies of agricultural products, such as fertiliser or fencing – and a retail business, through which they sell a wide range of products including animal feed, clothing, pet food and gardening tools.

The Competition and Markets Authority (CMA) is investigating Mole Valley’s proposed purchase of 48 Countrywide Farmers’ outlets, and has identified competition concerns in a total of 45 local areas. This involves both their bulk agricultural and retail businesses.

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. The 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.

Therefore, these alternative suppliers may not provide enough competition to stop customers from losing out after the merger. The CMA’s investigation found that competition concerns in the supply of agricultural products in bulk arise in 45 local areas in total.

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. If Mole Valley does 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 2’ 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.

Notes to editors

1. The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. For CMA updates, follow us on Twitter @CMAgovuk, LinkedIn, Facebook, Youtube and Flickr.
2. Enquiries should be directed to the CMA press team at press@cma.gsi.gov.uk or 020 3738 6460.

Minister for the Middle East and North Africa, Alistair Burt, said:

The Asad regime’s brutal siege of Eastern Ghouta, coupled with escalating bombardment and reports of chemicals weapons use, is causing unprecedented levels of suffering. The enclave has become a crucible of misery and violence, which is simply unacceptable in the 21st century.

Airstrikes, artillery and rocket attacks by pro-regime forces are at some of the most intense levels seen in the besieged area in years, leading to scores of civilian casualties. Over 700 people need medical evacuation, but the regime continues to refuse to allow this.

We call on the regime and its backers to cease this campaign of violence, to protect civilians and allow rapid and unhindered humanitarian access. As the international community has made clear to the Asad regime and its backers: the world is watching.

Further information

• Follow the Minister for the Middle East and North Africa on Twitter @AlistairBurtUK
• Follow the Foreign Office on Twitter @foreignoffice and Facebook
• Follow the Foreign Office on Instagram, YouTube and LinkedIn

Around £1 million of funds have been made available for charity as a result of the Charity Commission’s engagement with a grant-making charity.

In an inquiry report published today, the regulator outlines how governance failings resulted in unauthorised payments totalling approximately £650,000 to three trustees who were acting as consultants for the charity’s wholly owned subsidiary limited company.

The Commission opened its inquiry in February 2017 after newly appointed solicitors sought the current and former trustees’ relief from liability for the unauthorised payments, as well as permission to sell 99% of its shares in the subsidiary limited company.

The inquiry looked into the administration, governance and management of the charity, specifically regarding decision making and conflicts of interest; whether the proposed sale was in the best interests of the charity; whether there had been any private benefit to the current and former trustees; and whether restitution of funds was necessary.

The inquiry found that the consultants were conflicted as they had been trustees of the charity at the time of the payments, and had failed to identify or adequately manage this conflict of interest. The trustees were also unable to demonstrate that adequate records of their decisions had been maintained.

The inquiry considered the payments amounted to significant private advantage and financial benefit, as well as a direct breach of the charity’s governing document and the trustees’ legal duties. The trustees were also in violation of company law which requires them, as directors, to ensure records of their decisions are retained for at least 10years.

Although the inquiry recognised that the trustees had made “honest mistakes”, there was a strict prohibition against private benefit in the governing document. The Commission therefore engaged further and the trustees agreed to seek recovery of the £650,000 and adopt a formal conflicts of interest policy.

After reviewing the charity’s records the Commission was satisfied that the trustees had correctly managed conflicts of interest around the sale of the shares; the conflicted trustees had been removed from decision making and a new independent trustee appointed. The trustees had also sought independent professional advice and negotiated better terms to ensure that the sale was in the charity’s best interest.

The Commission therefore granted consent under s105 and s201 of the Charities Act to authorise the transaction, resulting in a further £350,000 going to the charity.

The inquiry remained open to ensure that the repayment took place, and was closed on 20 February with the publication of this report.

Harvey Grenville, Head of Investigations and Enforcement at the Charity Commission said:

Actively managing conflicts of interest is a fundamental principle of trustee decision making. We recognise that trustees are human beings who may make honest mistakes, but the bottom line is that you must always act in the best interests of your charity.

Our intervention has allowed this charity to claw back a significant amount of money that can now go to charitable causes. I hope this will encourage other charities to be mindful of their duties and consult our guidance when making important decisions.

The Commission’s full report of its inquiry is available on GOV.UK.

Notes to editors:

1. The Commission’s policy is to report on the outcome of statutory inquiries unless the public interest in not publishing would outweigh the public interest in publishing. The Commission carefully considered submissions from this charity which said that its identification in the inquiry report would be severely detrimental to the charity and its beneficiaries. However the Commission concluded that our findings should be published anonymously so that lessons could be learnt by other charities.
2. The Charity Commission is the independent regulator of charities in England and Wales. To find out more about our work, see the about us page on GOV.UK.
3. Search for charities on our check charity tool.