Tesco Booker deal gets provisional green light from CMA

Ivan Schwartz
November 15, 2017

It added that Booker's share of the United Kingdom grocery wholesaling market - at less than 20% - was not large enough to spark longer-term concerns.

It also decided the merger could bolster competition in the wholesale sector, rather than dent it as many of Booker's competitors argued, because the firm could benefit from improved suppliers' terms - with the savings being passed on to its own customers.

And this morning, the CMA said its "in-depth review" of the market had found "Tesco as a retailer and Booker as a wholesaler - supplying to caterers, independent and symbol group retailers including Premier, Londis and Budgens - do not compete head-to-head in most of their activities".

Booker is the country's largest wholesaler and owns Londis and Budgens as franchised outlets, and the CMA has previously said it was anxious that shoppers could face worse terms when buying their groceries as a result of the deal.

The group, recognising that Tesco's shops nevertheless compete with Booker-supplied shops, considered the impact of the merger in every local area where a Tesco and a Booker-supplied shop are both present (over 12,000 shops). It examined evidence from Tesco and Booker, as well as evidence from more than 65 wholesalers, suppliers and retail chains and a survey of hundreds of retailers.

The UK's Competition Markets Authority announced it had "provisionally concluded" a move by Tesco, the country's largest grocer, to buy Booker, its largest wholesaler, "does not raise competition concerns".

The CMA opened its phase 1 investigation into the merger in May.

Antibiotic Awareness Week-be part of the solution
Antibiotic resistance is a growing problem around the world, threatening global health and food security. Taking antibiotics encourages harmful bacteria that live inside you to become resistant.

Heher Commission Report Reminds Us of Harsh Truths On Student Fees
It is recommended that students with debt‚ who have since graduated‚ be offered income-contingent loans (ICL) as well". It concludes that fee-free education is not possible, as did a report released by the Davis Tax Commission on Monday.

Rosogolla Belongs To Bengal, Not Odisha: GI authorities
A GI tag certifies a region as the source of origin of a food product, guaranteeing a certain standard or authenticity. It was a day of celebration at " Rosogolla Bhawan", the family home of Nabin Chandra Das, the inventor of Rosogolla .

It said they argued that Booker could raise prices to the shops it supplies.

The Competition and Markets Authority (CMA) said its in-depth investigation into the proposed tie-up, first announced in January, had raised no competition concerns.

The U.K. regulatory body referred the merger for further investigation in July as it believed the deal could lead to worse terms for shoppers. The regulator's final decision will then be published by December 26 at the latest.

Bruno Monteyne, an analyst for investment bank Sanford Bernstein covering Europe's food retail sector, said: "The argument that Tesco and Booker don't compete directly in the convenience market won".

But while the CMA's findings remove uncertainty over the deal, he said the focus will now shift on to whether investors will approve the takeover.

The regulator denied concerns by wholesalers and symbol groups that the deal would give Tesco the ability to harm its rivals through its newly acquired wholesale arm.

Other reports by GizPress

Discuss This Article

FOLLOW OUR NEWSPAPER