The union told an open meeting called by the commission that the interests of both consumers and farmers are best served by a broad-based competitive food retail industry.

NFU head of marketing Robin Tapper told the meeting that farmers would not support any take-over of Safeway that resulted in a duopoly.

'The NFU would be gravely concerned if any deal resulted in the UK food retail market being further dominated by two main companies,' said Tapper. 'A situation where two companies account for 50 per cent of the retail food market would not be in either group's interest.

'If the further concentration of food retail power continues and competition reduces, the effect on farmers could be catastrophic.' The NFU said if Safeway was bought by one of the two existing major retailers – Tesco or Sainsbury's – there would clearly be a loss of competition in certain areas at a local level as well as nationally.

Tapper said: 'Obviously there are geographic considerations that need to be assessed where Safeway and a potential buyer both hold a large number of stores in a certain area,' he said. 'Equally, if it was decided that Safeway should be split up, the NFU would prefer decisions to be made on local considerations rather than more arbitrary measures such as store size or turnover.

'This would favour consumer choice, and also safeguard against the dominance of two major food retailers.

To ensure the food-retailing sector is as broadly based as possible, the NFU would not support any bid that did not make a commitment to the long-term objective of developing the company into a major food retailer.

Tapper said: 'The last that consumers and farmers need is the complete loss of Safeway stores to food retailing.'

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