Wal-Mart enemies fight Asda bid

Conservationists and politicians oppose pounds 6.7bn Asda takeover

WAL-MART'S bid for Asda is running into concerted opposition from a number of groups preparing submissions for the Office of Fair Trading.

At the forefront is the Council for the Preservation of Rural England (CPRE), which is concerned that the giant American retailer will find a way to avoid out-of-town planning restrictions for its huge stores.

Wal-Mart has remained tight-lipped about its plans for Asda should the deal go ahead.

The Department for the Environment, Transport and the Regions has maintained that it is committed to its policy which restricts development of the large out-of-town stores that Wal-Mart favours in the US.

But Neil Sinden, head of planning at the CPRE, fears the US giant will overdevelop current retail sites: "Wal-Mart may be looking at redeveloping large existing stores. We are very concerned about the potential impact in terms of urban sprawl, traffic, damaging land and economic networks. The other danger is that they might find loopholes in the current policy framework. Wal-Mart could be devastating for high streets."

Linda Douglas, chief executive of Action for Market Towns, an organisation with 230 members, said: "We are concerned that they will put pressure on the Government to relax out-of-town retail developments of the kind which have upset towns. We will be writing to the relevant minister."

The announcement that Asda had agreed a pounds 6.7bn bid from Wal-Mart, the world's biggest retailer, came on Monday and was greeted with widespread surprise.

Wal-Mart had previously indicated its unwillingness to buy a British supermarket and Asda was in the closing stages of a merger with Kingfisher. Although Wal-Mart's arrival is expected to trigger lower supermarket prices, there is monopolistic concern at the company's ability to exert huge pressure on its suppliers.

The other big supermarket chains - Safeway, Sainsbury and Tesco - are expected to voice their concern about the threat that Wal-Mart will start a price war. But Asda's main suppliers are unwilling to speak out for fear of antagonising Wal-Mart.

There is also concern about Wal-Mart's attitude to trade unions. Its 815,000 employees in the US are banned from membership.

Asda, by contrast, has developed a good relationship with its main union, the GMB, and its employee share ownership scheme has been acclaimed.

One retail source said: "I think Wal-Mart will offer Asda employees a cash alternative for their shares. The last thing they want is a lot of staff turning up at their agm."

However, Derek Hunter, national secretary for the GMB's food and leisure section, said: "We have called for a meeting with Asda, but we are not pre-judging anything."

MPs on either side of the House of Commons have also joined the chorus of disapproval. John Redwood, Conservative spokesman for the environment, transport and the regions, said: "I am worried about the Government coming under pressure, knowing they will get cheaper food if they relax their planning policy. And what is the exact definition of out-of-town? I want them to be honest about it."

Labour ex-minister Joan Ruddock was worried about the implications for planning policy: "Wal-Mart's bid for Asda appears to fly in the face of the Government's commitment to restricting road traffic densities."

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