Regulatory Action: Tesco Fined £7.56 Mn, CMA Examines Sale of Arm Holdings

Summary

  • Tesco has been penalised for selling food past its use-by date at three of its Birmingham stores.
  • Nvidia’s takeover of Arm Holdings faces UK national security probe.

Prominent companies in the UK are under the government’s lens for violating basic rules. On Monday, Tesco was fined £7.56 million for selling food beyond expiry date in Birmingham stores. The Birmingham city council said that the supermarket chain has been asked to pay a penalty at Birmingham magistrates’ court. Additionally, it has been asked to pay prosecution costs worth £95,500 and victim surcharges worth £170.

In another case, the UK government is examining the sale of computer chip designer Arm Holdings to US-based company Nvidia on national security grounds.  The UK-based tech firm was sold off to Nvidia for about $40 billion. Examining the deal, UK digital secretary Oliver Dowden said that the UK's competition watchdog should assess the implications before the deal is sealed.

Tesco Plc

Tesco was fined after the supermarket chain admitted that there were at least 22 food safety and hygiene breaches between 2016 and 2017. The investigations were triggered after the local authority received complaints regarding out-of-date food being sold at least three stores. Expired food items were found at two Tesco Express stores - one at Carr's Lane and another at 175 Linden Road, and at a Metro store in Bristol Road South.

A company spokesperson remarked that the retail firm was disappointed regarding the discovery of a small number of out-of-date products on sale in the three stores in 2016 and 2017. He added that the company took prompt action to resolve the issue. The spokesperson added that robust procedures had been put in place to prevent such a mishap from happening again.

The company’s shares (LON: TSCO) were down 0.38 per cent on Tuesday at 8.43 AM, trading at GBX 233.60.

Also Read: Tesco PLC (LON: TSCO) and Pizza Hut caught paying staff below minimum wages

Arm Holdings

The sale of Arm Holdings has become a critical matter as its technology is at the heart of most smart devices and smartphones across the world. When the firm accepted the takeover offer from US graphic chip specialist Nvidia, the UK Competition Markets Authority (CMA) intervened and said that the deal was under lens.

UK digital secretary Dowden insisted that while the government wanted to support the thriving tech industry in the UK and foreign investment is crucial, but at the same time, it is proper to analyse the national security aspect of a deal like this.

Also Read: Graphcore Calls on UK Regulator to Block Nvidia-Arm Acquisition

In September 2020, Nvidia signed a trade deal with Japan’s SoftBank Group to buy Arm Holdings in a bid to revolutionise the international semi-conductor landscape. Arm supplies its critical chip technology to different customers in various countries, including Nvidia’s rivals.

The CMA wanted to examine the likelihood of the deal in raising prices, withdrawal, or reduction in quality of services to Nvidia’s rivals. The market regulator is now undertaking Phase-1 investigation. Its results will decide if a Phase 2 probe is required and eventually clear the deal.

The share price of Nvidia Corporation (NASDAQ: NVDA) was down 3.46 per cent to US$614.47 at market closure on Monday, 19 April.

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