The acquisition this week of a controlling stake in Costcutter by Bibby Line Group has reignited speculation of a possible merger between Nisa-Today's and Costcutter.

Several Nisa-Today's members have told The Grocer the deal has created a real possibility of a merger because of the close relationship between Bibby and Nisa-Today's.

Bibby Distribution, a wholly-owned subsidiary of Bibby Line Group, has handled Nisa-Today's logistics and distribution for the past 22 years.

"I can see a situation whereby, when Costcutter's membership agreement with Nisa-Today's runs out in 2014, Bibby could use its influence to push for a merger," said a senior executive at one large Nisa-Today's member.

However, some members have also expressed concerns about a possible conflict of interest. Bibby has taken a 51% controlling share in Costcutter including the 20% held by investment bank Kaupthing.

Bibby acquired the other 31% from Costcutter directors including chairman Colin Graves, MD Nick Ivel and trading and marketing director Angela Barber, who reduced their stake but will continue to operate the business. Bibby will take three places on the board.

Graves said Nisa-Today's would be happy the company had not been sold to a trade rival. But Ian Hunt, MD of Filco Supermarkets, said Costcutter may have to consider its position on the Nisa-Today's board.

"Nisa has a contract with Bibby, so what happens when it comes to Nisa discussing contracts regarding distribution?" he said. "There could be a situation were Bibby gains knowledge of commercial thinking about Nisa or other potential distributors, compromising Nisa's position."

Hunt also expressed concerns that Nisa members could be adversely affected by rising distribution costs should Bibby aim to make a return on its investment.

Independent Nisa retailer Kishor Patel welcomed the deal. "If Bibby is getting involved for the right reasons, the move could make Bibby and Nisa-Today's the strongest player in the independent sector," he said.

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