Waitrose threat to veto Morrisons’ deal with Ocado

Delivery group Ocado has so far only worked with Waitrose. Picture: Contributed
Delivery group Ocado has so far only worked with Waitrose. Picture: Contributed
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UPMARKET grocer Waitrose has threatened to veto plans by online food delivery firm Ocado to team up with rival Morrisons.

Mark Price, chief executive of Waitrose, dropped a bombshell over the weekend by saying his company’s lawyers would scrutinise any deal between Morrisons and Ocado to see if there is any breach of Ocado’s existing contract with Waitrose.

The potential Morrisons-­Ocado deal, announced in March, has triggered a range of speculation from outright merger to a joint venture involving intellectual property rights.

Currently, Waitrose is the only big UK supermarket group supplied by Ocado.

But Dalton Philips, chief executive of Morrisons, which has nearly 60 stores and a 15 per cent market share in Scotland, has made no secret of his desire to develop an online offering from scratch, an area in which it lags behind all its main food retailing rivals.

One industry source told The Scotsman yesterday: “I think this is obviously a sensitive issue for Waitrose, and a deal between Morrisons and Ocado is still right now hypothetical.

“But Ocado and Morrisons are smart operators. You would reckon they were legally savvy enough not to put together an agreement that would directly cut across contractual agreements Ocado already has.”

Price said at the weekend: “I would never knowingly sign a contract with Ocado that agreed to them working with another retail competitor.”

Waitrose is owned by the John Lewis Partnership, which provided seed capital for Ocado when it was launched.

Morrisons, which is Britain’s fourth-largest supermarket chain, declined to comment yesterday. Ocado said at the weekend there were “no concerns about a conflict of interest”.