The roll-out of the Budgens Local franchise operation could be accelerated following Musgrave's acquisition of 28% of Budgens' shares. Musgrave is Ireland's largest food distributor and operates 500 franchised stores throughout Northern Ireland and the Irish Republic. The Grocer revealed it was looking to expand into Great Britain in May last year. Musgrave Group md Seamus Scally said: "We conducted extensive research in Britain and found Budgens is the operator which most closely mirrors what we do in Ireland." The companies have worked closely together for a number of years as members of Nisa's central buying consortium. Scally and finance director Michael Walsh will join the Budgens board. Walsh said: "It's a management team with a strong track record which we have got to know very well over the last two years." He said their introduction would not herald major changes but he believed Musgrave could contribute to the Budgens Local scheme. Budgens Local is the franchise operation for independents launched in July. Commenting on a prediction by Budgens chief executive Martin Hyson when it was launched that he was looking for 50 members within two years, Scally said: "I think they may set their sights higher. What we need to do is prove our franchise model will transfer to the UK." Scally also said the two companies had combined purchasing power of £2bn and had many major suppliers in common and would be comparing terms. Musgrave paid German retailer REWE £89.4m for its 28% share of the business, with options to raise its holding to 43.5%. The deal included a clause preventing Musgrave from bidding for the remainder of Budgens for 12 months unless a counter bid is made. Walsh said the next year would be an opportunity to learn more about Budgens, but would not comment on whether it might bid for the entire company. REWE said it was withdrawing from the UK because conditions were not suited to its deep discount strategy. - Scally said Musgrave was not the mystery company behind plans for a 550,000 sq ft distribution centre at Mullingar, 40 miles west of Dublin (Grocer, August 19, page 8). {{NEWS }}

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