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LONDON - The chief executives of the four supermarkets hoping to buy Safeway PLC in the UK on Wednesday morning made their cases at an open hearing of the government's Competition Commission.
In an opening session focusing on the issue of local competition, the CEO of Wal-Mart-owned Asda Group Plc, Tony De Nunzio, argued that an Asda acquisition of Safeway would force competitors to reduce prices.
Meanwhile, chairman Ken Morrison of William Morrison Supermarkets Plc argued that a combined Safeway/Morrisons would provide economies of scale currently available only to Sainsbury's, Tesco and Asda or the "Big Three" supermarkets.
Morrison said the market place would be anti-competitive and "unhealthy" if any of these three were allowed to buy Safeway.
The chief executive of J. Sainsbury Plc , Peter Davis, said the "duopoly" that would result from either Tesco or Asda buying Safeway would lessen competition for consumers.
Tesco Plc's Terry Leahy said a takeover of Safeway could allow Tesco, as market leader, to lower prices further for customers. Since 1999, prices at Tesco have already fallen by 4.5 percent, he said. He added that a Tesco acquisition of Safeway would lead to a net creation of 5,000 new jobs.
The chief executives are arguing their cases as part of an ongoing inquiry into the acquisition of Safeway.
The Competition Commission is due to report its findings in August.