Competition Commission probes Compass's bid for Rail Gourmet

The proposed takeover of Rail Gourmet by Compass was referred to the Competition Commission last week. The commission has until 17 June to decide whether the acquisition would be against the public interest and restrict rail passengers' choice.

Competition minister Melanie Johnson said: "The acquisition appears to eliminate a main competitor of Compass, leading to an extremely high market share in the on-train food market."

The director general of fair trading has advised that Compass's acquisition of Rail Gourmet would give the merged parties a combined market share of 91%. Compass would, therefore, provide the majority of food both on trains and at train stations, which could restrict passenger choice.

Rail Gourmet operates catering on Virgin, GNER and Midland Mainline routes, among others. Compass already has an on-train contract with Scotrail and is a minority partner in a deal with Eurostar, as well as running 360 catering facilities at 150 UK railway stations through its Select Service Partner division.

Compass announced its agreement to acquire Rail Gourmet, along with European food service firm Restorama and part of Gourmet Nova, last December. The companies are all arms of the failed Swissair Group.