CMA provisionally clears Amazon’s investment in Deliveroo to ensure its survival: The Competition and Markets Authority (CMA) has provisionally cleared Amazon’s investment in Deliveroo after the delivery firm revealed to the watchdog it would have to cease operations without the cash injection. Amazon was the lead investor in Deliveroo’s $575m funding round, announced in May last year. Its stake, thought to be worth about $500m, has been frozen by the regulator as it conducts an investigation into alleged competition concerns raised by the deal. After completing an initial, Phase 1, investigation, the CMA was concerned the deal could damage competition by discouraging Amazon from re-entering the online restaurant food market and further developing its presence within the online convenience grocery delivery market in the UK. The CMA has continued to investigate these concerns during its in-depth, Phase 2, investigation. However, in recent weeks, it has become clear the coronavirus pandemic is having a significant negative impact on Deliveroo’s business. The CMA stated: “The ongoing lock-down in the UK has resulted in the closure of a large number of the key restaurants available through Deliveroo, and a significant decline in revenue. While Deliveroo has sought to expand its supply of convenience groceries during the crisis, these sales are limited and have not made up for losses in its restaurants business. As a result, Deliveroo recently informed the CMA the impact of the coronavirus pandemic on its business meant it would fail financially and exit the market without the Amazon investment. Deliveroo’s submission was supported by evidence from the company’s financial advisers. The CMA has been considering this new evidence as a matter of urgency. It has provisionally concluded Deliveroo’s exit from the market would be inevitable without access to significant additional funding, which the CMA considers only Amazon would be willing and able to provide at this time. While securing additional funding from other sources may have been possible before the coronavirus outbreak, the pandemic has severely limited the availability of finance for early-stage businesses such as Deliveroo. The CMA currently considers the imminent exit of Deliveroo would be worse for competition than allowing the Amazon investment to proceed and has therefore provisionally found that the deal should be cleared.” Stuart McIntosh, chairman of the CMA’s independent inquiry group, said: “These wholly unprecedented circumstances have meant reassessing the focus of this investigation, reacting quickly to the impact of the coronavirus and deciding what it would mean for the businesses involved in this transaction and, in turn, for customers. Without additional investment, which we currently think is only realistically available from Amazon, it’s clear Deliveroo would not be able to meet its financial commitments and would have to exit the market. This could mean that some customers are cut off from online food delivery altogether, with others facing higher prices or a reduction in service quality. Faced with that stark outcome, we feel the best course of action is to provisionally clear Amazon’s investment in Deliveroo.” The CMA is asking for views on these provisional findings by 5pm on Monday, 11 May and will assess all evidence provided before making a final decision. The statutory deadline for the CMA’s final report is Thursday, 11 June.

 

FeedNHS initiative to go national next week: FeedNHS, the campaign spearheaded by natural fast food brand Leon and actors Damian Lewis, Helen McCrory and Matt Lucas, is to go nationwide from Monday (20 April). The initiative, which is working with Mealforce, Feed our Frontline and BaxterStorey to co-ordinate the provision of food for critical care teams across the NHS, will expand out of London, to help feed NHS teams in Aberdeen, Glasgow and Edinburgh, with ongoing discussions to expand to Manchester, Birmingham, Brighton and Cardiff. Meals are being served by Leon, BaxterStorey and by Mealforce, a group of businesses working with the charity NHS Helpforce. As a result, the coalition now has the scale to serve more than a million meals. Working alongside Leon are a number of sector brands including Dishoom, Wasabi, Tortilla, Franco Manca, Farmer J and Wrap it Up. Through the support, FeedNHS, which reached £1m in the first two weeks of fund-raising, has taken the number of meals it serves to 25,000 per day. By Monday, the coalition will be serving 55 hospitals. It has estimated it will be able sustain this for the next six weeks, but more money is required in order to increase the number of meals served by an additional 15,000 and to extend provision beyond six weeks. John Vincent, chief executive and founder of Leon, said: “I would like to thank our partners who now meet online daily and communicate constantly – Ian Wace from Mealforce, Alastair Storey and Noel Mahony from BaxterStorey, Brandon Stephens from Feed our Frontline and Kirsty Saddler from my own organisation, Leon. As well as Damian and Helen and Matt who have led the work of FeedNHS from the beginning.” Carol Haraldsson, head of charitable giving at UCLH NHS Trust Foundation said: “Many doctors and nurses in critical care units do not have time to leave wards to get a good meal. Support from the FeedNHS coalition and funding has made a massive difference to our front line team at UCLH, helping to get meals to NHS staff that need them most.”

 

Greene King offers rent support to tied tenants: Greene King Pub Partners has written to its 975 tied tenants outlining its plans to enter into individual discussions. Eligible partners who have been impacted the most by the forced closures can apply to the Partner Support Fund to access immediate financial support on rent and further support when it comes to reopening. Support will be offered to tied tenants who need further help after they have utilised all relevant government schemes. One-to-one discussions will take place with tenants and their business development managers over the next four weeks. The financial support is in addition to the help Greene King has already offered to all partners to ease cash flow concerns, including deferred rent and free replacement beer for kegs and casks that may be out of date when pubs are able to reopen. In a letter to tenants, Pub Partners managing director Wayne Shurvinton said: “While pubs remain closed we will be focusing support where it is needed most now, giving due consideration to government support provided. I’m sure you’ll appreciate the immediate support we offered and the opportunity to enter into one-to-one discussions is in stark contrast to many other retail and hospitality businesses with many facing insolvency action with statutory demands from landlords already being served. Many of these businesses have not had the opportunity to access the support, financial or otherwise, we are providing to you as a tied pub partner. Our view is many pubs will be affected differently and there will not be a one size fits all solution. Our goal will be to provide an appropriate amount of targeted financial support to those partners who need it the most while at the same time ensuring the financial survival of our business and the 38,000 employees who depend on us.”