The UK’s Competition and Markets Authority (CMA) has expressed concerns that the acquisition of 30 CTD Tiles outlets by specialist retailer Topps Tiles might lead to less competitive pricing and service in four areas of the country: Dorking, Edinburgh, Inverness and Aberdeen.
Topps announced the £9m deal in August 2024.
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It includes the physical stores and essential assets such as inventory and all associated intellectual property rights for CTD Tiles, CTD Architectural and CTD Housebuilders.
In October 2024, the CMA initiated an examination of the transaction following a series of complaints that highlighted potential negative impacts on both businesses and retail customers in particular localities.
The preliminary Phase I inquiry by the CMA pinpointed specific concerns regarding competition in Dorking, Edinburgh, Inverness and Aberdeen for the supply of tiles to both retail and business consumers.
The investigation revealed a close competition between the two companies for customers in these areas.
After scrutinising internal documents and gathering input from both customers and competitors, the CMA acknowledged that while many areas still have adequate competition, there are a few where the merger could result in less favourable outcomes for customers.
CMA mergers executive director Joel Bamford said: “Having looked at the evidence, we’re concerned Topps Tiles’ purchase of CTD Tiles may reduce competition in Dorking, Edinburgh, Inverness and Aberdeen.
“This loss of competition could lead to worse deals and service in those areas. Whether you’re retiling your own home or a business that provides renovation services, the merger could make such projects more expensive.
“Topps Tiles now has the opportunity to offer solutions to our concerns, otherwise this case will proceed to a more in-depth investigation.”
Topps Tiles has until 24 February 2025 to submit proposals addressing the CMA’s concerns.
In response to CMA Phase I referral decision, Topps said: “The company is pleased to note that following the announcement of its Phase I decision today, the CMA found that the transaction has generated no competition concerns in the majority of areas reviewed. Specifically, the CMA agreed with the company that its acquisition of the CTD commercial tile operations (CTD Architectural and CTD Housebuilder) did not raise any competition concerns and that in 26 out of 30 locations where retail stores were acquired, no local competition concerns were identified.”
