Safeway bidders fear OFT may move goalposts

Britain's biggest supermarket groups have sought to play down speculation that the publication of the Office of Fair Trading report into the bid battle for Safeway would contain fresh revelations that would damage their takeover hopes.

Weekend reports suggested that the detailed findings, expected this week, would attempt to redefine what constitutes a local market and the "drive-time" to local supermarkets. They follow last week's decision by the OFT to refer the bids from Wal-Mart/ Asda, J Sainsbury, Tesco and William Morrison to the Competition Commission. Only the bid from the retail entrepreneur Philip Green was cleared.

Under the terms of reference used by the commission into its investigation into the sector in 2000, a competitive local market was defined as one in which there were three competing supermarkets within 15 minutes drive of each other.

But now it is believed the OFT is considering changing this to a drive-time of 20 minutes in rural areas. This would lead to more overlaps between the stores of each bidder and more store disposals required to receive bid clearance. However, the wider definition would also bring more competing supermarkets into each region.

The OFT declined to comment on the detail included in its report but it is understood that the problems in defining a local market was one of the reasons it decided to refer four of the bids. It is thought that most of the groups used different speeds in the drive times they submitted to the OFT.

Safeway used the Department of Trade and Industry definition, others used that given by the AA and others used a different driving speed. "I think the OFT just found the thing so confusing that they decided they would just leave it to the Competition Commission to resolve," one analyst said.

Separately, Safeway's chief executive, Carlo Criado-Perez, has admitted that it is struggling to retain the support of its suppliers as the bid battle rages on.