Tesco and Booker merger faces in-depth investigation

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The Competitions and Markets Authority (CMA) has referred the proposed merger between Tesco and Booker for an in-depth investigation after concluding that shoppers could face “worse terms” in more than 350 areas across the UK.

The CMA formally opened its ‘phase 1’ investigation into the proposed merger on 30 May, with completion originally due on 25 July. However, two weeks ago Booker requested that the CMA fast-track its investigation.

In a statement announced today (Wednesday), the CMA said it believed that in more than 350 local areas where there was currently an overlap between Tesco shops and Booker-supplied symbol stores, “shoppers could face worse terms when buying their groceries”.

“There are concerns that, after the merger, there is potential for Booker to reduce the wholesale services or terms it offers the ‘symbol’ stores it currently supplies, in order to drive customers to their local Tesco,” it added.

“Other concerns were raised and considered in the CMA’s phase 1 investigation but the CMA has not found it necessary to conclude on all of these concerns given the ‘fast track’ referral.”

The investigation will now pass to a new set of decision makers – an inquiry group chosen from the CMA’s independent panel members, it said.

This group will assess whether the deal could reduce competition by conducting further research and analysis as well as seeking views and evidence from all those potentially affected by the merger.

The statutory timetable for the in-depth phase 2 investigation is 24 weeks, which means the final report will be published before Christmas – following an earlier provisional findings report.

Readers' comments (5)

  • Well that's a done deal then :-) Happy Days.

    Easy to prove that if terms get worse retailers can join other delivered wholesalers or C&C.
    Can you imagine the CMA question - if Bookers put your wholesale prices up would you-
    1. Suck it up like a good boy?
    2. Moan and groan?
    3. Move wholesalers?

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  • Why would Tesco disadvantage existing Bookers independents to support just 350 of their existing 3000 stores?

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  • Redmond, it's 350 areas, not 350 stores!

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  • Whilst the CMA, a quango, deliberates slowly on Fair Great British Retailing --- Amazon which is unfair non British Internet off shore Retailing is making its move to snaffle the Great British Customer.

    Whilst Sky a Great British Broadcaster wishes to enhance its Offer to the British viewer by acquiring 100% share capital another not so great British Quango deliberates slowly on how bad for the viewer Sky could become.

    Whilst all these quangoes deliberate to stop and slow enterprise, the not so Great British Government is doing its best to stop Europe from interfering in Great British Life.

    Britain surely is going crazy.

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  • I agree that the CMA is just another useless quango with little strategic remit or power to do something more useful. I also agree that, whilst rich Amazon, another internet business is quietly wiping the opposition, they (CMA) are more concerned about choice to the British consumer which quite frankly is laughable. British people never had it so good in terms of choice and five years of deflation which then led to milk & beer being cheaper than water. The ridiculous thing about CMA is that they did nothing about utility monopoly nor did they do anything about the big four decimating market towns up and down country by giving too much power to out of town supermarkets. They were not in the least bit interested in choice then nor was the government. The choice of local butchers, and the rest was gone. Also that scenario resulted in the race to the gutter on price and value whilst the big four were fighting each other. Quality went out of the window as there is no such thing as a free lunch. Questionable pies with questionable meat content said it all.
    Of course we have to evolve and move on but to stop businesses consolidating in view of Amazon and the German discounters (Aldi & Lidl) who are also expanding at a rate of knots can only mean bad news in the long run. Some retailers are also not helping themselves by peddling conspiracy theory whilst the new comers are literally whipping the convenience sector and their livelihood. Perhaps someone needs to look out of the window before questioning why we need consolidation in our sector.

    Arjan Mehr Landis Bracknell.

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