The Office of Fair Trading will not refer Tesco’s acquisition of Mills Group to the Competition Commission.

The deal, which Tesco is making through its One Stop chain, will add a further 76 stores to its portfolio.

The £20m acquisition has angered the Association of Convenience Stores.

ACS chief executive James Lowman said: “If Tesco sought to takeover a company operating 76 large supermarkets then it would most likely be blocked. We fail to see any reason why this merger has been treated differently.

“A series of takeovers of convenience store groups have taken place over the past eight years and none have been subject to a full competition investigation. In that time Tesco has grown from a convenience store estate of around 80 stores to over 1,700 today. The OFT has once again failed to fully consider the implications of this for choice and competiveness in the long term.

“Most damaging of all is the OFTs failure to engage with the implications of the persisting growth of Tesco’s ‘shadow brand ‘One Stop.’ They have therefore no answer to whether consumers are at risk of discrimination on price, quality, range and service.”