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Adjacency rule

Moto Motorway services sign in Wales.
Two Moto services in a row on the M4, permitted only after an investigation into Granada buying Pavilion in 1995.

The adjacency rule is a term used to describe the policy of the Ministry of Transport and its successors which banned the contract for a motorway service area being awarded to a company who already owned an adjacent one. The rule applied regardless of whether the two services were on different motorways, so where two motorways crossed, you needed four motorways ran by four different companies.

The policy was applied when services were sold between companies, and even when new services were expected to open between two existing sites.

In the 1980s, the policy stopped being applied rigidly after a recommendation in the Prior Report. This was inevitable as operators were no longer having to bid for contracts, meaning today's Department for Transport can't stop an operator owning several services in a row. An example of this is Moto owning three in a row on the M4.

Instead, the Monopolies and Mergers Commission have the responsibility of investigating companies who appear to be forming a monopoly, which they did with Granada in the 1990s.

In Ireland, service area contracts are awarded in groups, inevitably creating strings of services owned by the same company.

Introduction

When the first two M1 services were opened to tender, the Ministry were looking for two different operators, to ensure the trial had a bit of variety. Motorway Services Ltd made respectable bids for both and could have easily won them.

In 1962, Motorway Services Ltd again made respectable bids for all three of the services planned for the M6. With their experience in catering and operation, and the money they were able to throw behind it, Motorway Services Ltd were coming close to winning every tender they submitted. When the decision was made not to award them Knutsford, this policy was recommended and created to ensure there was not going to be a monopoly on the motorway network.

Exceptions and Subversions

Soon after it was created, an exception was granted allowing the very thing the rule was supposed to stop. Due to the difficulties faced at Newport Pagnell, Motorway Services Ltd were allowed to bid for Toddington and treat it as an overflow facility. They didn't win the bid. The same happened with Blue Boar at Rothersthorpe.

In the late 1960s, Granada were the first to claim the rule was stifling their performance. They were forbidden from bidding for Corley because they already owned Frankley, which was technically adjacent. However, once the M42 was open, nobody would be making that journey. They were eventually allowed to bid for Corley (which they didn't win), and more exceptions were granted in regions where traffic levels doing a particular manoeuvre were expected to be low.

Throughout the 1960s, Granada had been trying another trick. Most of their bids were ridiculously large, their strategy being to build a restaurant with so many seats that there would be no reason for anybody else to build any services. In most cases, their strategy failed as their proposed large buildings were refused.

At Forton, Motorway Services Ltd were more underhand. The documents for the services specifically said they were forbidden from bidding because they already owned Charnock Richard. As a result, Motorway Services Ltd submitted a bid in the name of their parent company, Fortes, and claimed they didn't own any services. They were found out immediately and their proposal was rejected.

At Rownhams, Fortes were not allowed to bid because they owned Fleet which was going to be adjacent. However, the invitation was sent to them by accident, and they were later granted an exception.