Log in or Register for enhanced features | Forgotten Password?
White Papers | Suppliers | Events | Report Store | Companies | Dining Club | Videos
General Retailers
Hypermarkets & Supermarkets
Return to: RBR Home | General Retailers | Hypermarkets & Supermarkets

UK’s CMA refers Tesco/Booker deal for in-depth, phase 2 probe

RBR Staff Writer Published 13 July 2017

The UK's Competition and Markets Authority (CMA) has referred an in-depth, phase 2 investigation into Tesco’s £3.7bn proposed takeover of food wholesaler operator Booker.

The watchdog’s decision comes after it found that the merger could leave some customers paying more for their groceries.

Its concerns revolve around more than 350 local areas where shoppers could be impacted because of a current overlap between Tesco stores and more than 5,000 Booker-supplied franchises like Premier, Budgens, Family Shopper and Londis which have been referred as ‘symbol’ stores by the CMA.

The phase 2 investigation into the merger will have a timeline of 24 weeks with a final report expected to be put up by Christmas time. The CMA says that an interim report with provisional findings in the probe will be published before that.

Among the concerns listed out by the CMA is that post merger, there is a possibility for Booker to cut down on the wholesale services or terms it provides to the symbol stores to which it has currently committed to supply. This, CMA says could be a ploy that could possibly implemented by Booker in the future to drive shoppers to their nearby Tesco store.

The CMA stated: “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.”

According to the watchdog, the probe will be handled by a new group of decision makers who will be picked from its independent panel members.

The new group will judge if the merger can decrease competition by carrying out further research and analysis alongside taking feedback and evidence from all the parties that could be impacted by it.

Image: Tesco-Booker merger deal faces an in-depth probe from CMA. Photo: courtesy of Crown copyright.