I was discussing the bailing out of Lloyd’s Bank (a large U.K. bank) with a friend. I raised the point that Tesco (a large supermarket) is also continuing to struggle after their accounting scandal, and associated large debts. It also recently had a large drop in the values of its shares, partly due to the difficulty for retailers.
We both agreed that there’s a high likelihood that the government would be forced to bail out Tesco in the event of bankruptcy, in a similar vein to the Lloyds Bank bailout.
It’s unlikely that the remaining supermarkets would be able to absorb the increased demand, and there would be huge food shortages while Tesco’s suppliers negotiated new contracts to supply the remaining supermarkets. It would also be a challenge to get customers through the checkouts quickly enough, or restock the shelves with the current staffing levels.
It would also cause a large number of local monopolies; locations where there were two separate supermarkets, but, after the closure of the Tesco store, are now only serviced by one company.
For these reasons, or perhaps others, has any government, anywhere had to bail out a supermarket (or similar large food supplier)?