Compass gets approval for purchase of Rail Gourmet

Compass's purchase of on-train catering company Rail Gourmet has been cleared by the UK Competition Commission. The acquisition was not against the public interest, said the commission.

Its report said that the merger meant that the group's share of supply would increase by only 3%, from 80% to 83%, and that the market for on-train catering services in the UK was a bidding market, controlled by the train operating companies.

It added that the merger was unlikely to discourage other potential competitors from bidding for on-train catering service contracts or to allow Compass to exercise "enhanced market power to the detriment of competition".

The commission said it was concerned, however, about the way in which train operating companies controlled their catering contracts, and has suggested an inquiry into how more might be done to encourage competition and creativity.

Compass first announced it was buying Rail Gourmet in December last year. The deal, which also included the pan-European Restorama and Gourmet Nova catering businesses, was referred to the Office of Fair Trading in February.