Parfetts chairman raises Tesco-Booker concerns with ministers

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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.”

Readers' comments (3)

  • I strongly disagree with some of the sentiments and statements expressed by the chair of Parfetts.

    Any one being objective in these challenging times, never mind my membership of the Londis group knows that when the convenience sector is going through one of the biggest step change in its history, standing still and doing nothing is not an option. Can I also point out that it’s not the job of CMA to fix competition rules so that less efficient players can be saved from oblivion hash it may sound. I also find the wholesalers view contradictory. The primary job of any CEO is to offer the best prices for its customers and make some money for its shareholders. I cannot see how that conundrum can be fixed if the Booker merger with Tesco is rejected bearing in mind that some the weaker players will be wiped out regardless of Booker/Tesco merger in any case. The CMA report clearly states and contradicts some of the objectors in the market in that there is little or no conflict between the two groups and at the same time the retail customers will also not be worse off as there is too much completion in the market place as is and there is no way Booker/Tesco merger can afford to increase their prices and ultimately attack its own for short term profit. That would be commercial suicide at the very least.

    The recent debate in the press about the direction of the convenience sector can be seen to be sitting in two camps. One who have seen light and the big challenges of internet operators like Amazon and the German discounters and how to counter it and the other wanting to simply not accept the reality of market forces. I my humble opinion the second camp should take a stiff drink and regroup with other likeminded objectors and find ways of being more efficient and help the convenient sector and its members at the same time.


    Arjan Mehr Londis Bracknell

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  • I strongly believe that Tesco -booker deal is not in the interest of retailers . question to ask is why entity like Tesco is buying booker when they already hold 26% of the market ? answer is simple . they can crush the wholesale market independents . once they have wiped out competition , than what is stopping them raising their prices from cash and carries ? have they not done similar tactics where they had opened new stores ? Tesco is no charity as they need maximum profit from their investments . the biggest lie the supermarkets promote of creating jobs and better pricing have been exposed as a lie . the fact remains that independents employ more ppl for every £ gone through their tills compared to supermarkets . the trouble is independents cant look / think beyond the tip of their noses to take in account future implications . the supermarkets have spent loads of money to research soft points of independents and to target them with warm words ..... nisa -coop is the same scenario . warm words and no guarantees . throw 20 pieces of silver and let the fools follow like sheep . .

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  • 2018 is going to be very very difficult for the Indies thanks to the greed of the Mults.

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