The chairman of employee-owned wholesaler Parfetts has written to ministers and MPs about the CMA’s “catastrophic error of judgement” in provisionally clearing the Tesco-Booker merger.
Steve Parfett has written to business secretary Greg Clark MP, the six MPs in whose constituencies Parfetts has depots, his own MP and shadow business secretary Rebecca Long Bailey, “asking that Parliament recognises the serious implications of this fundamentally flawed decision”.
He said the CMA “seemingly don’t understand – or don’t want to understand – competition principles, in either theory or practice”.
“The CMA quotes Bookers’ current market share as 20% – a figure achieved on a relatively level playing field in buying terms, for the wholesale sector,” he told C-Store.
“Using this to justify awarding access to Tesco prices achieved via abuse of buying power is intellectually inconsistent and a seriously flawed decision. Tesco’s pricing advantage had been previously recognised – but not dealt with – by the CMA’s predecessor, the Competition Commission.
“This lack of recognition of such ‘vertical issues’ – and resulting permanent distortion of the whole grocery sector – shows a catastrophic error of judgement.”
He said several major wholesalers would seriously consider a reference to the Competition Appeals Tribunal. Sugro managing director Philip Jenkins is also understood to have written to MPs.
Landmark Wholesale managing director John Mills has also issued a stark warning about the impact of approving the merger. “We are incredibly disappointed with the CMA’s decision. This move will not increase competition, it will destroy it,” he said.
However, Scottish wholesaler JW Filshill was more philosophical about the CMA’s decision. Retail sales director Craig Brown told C-Store: “We’re a bit disappointed regarding the CMA’s comments on competition, but we’re more interested in focusing on being a ‘better us’. We’re focusing on our lines and working with our retailers in terms of branding and customer service.
“We’re proud of being a family business with a long history, and I think that’s a real USP,” he added. “If we get distracted, we’d be letting our customers down. There’s not much else we can do in terms of what’s happening in the wider market.”