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Tesco-Booker merger gets go-ahead

But rival wholesalers consider appealing CMA’s decision on £3.7bn acquisition


TESCO’S £3.7billion acquisition of wholesalers Booker has been given the final all-clear after an investigation determined it would not lead to higher prices or impact on service for shoppers.

But just a day after the announcement by the Competition And Markets Authority, Retail Gazette reported yesterday (Thursday, December 21) that the bosses of seven of the UK’s biggest grocery wholesalers have put aside their competitive differences to consider lodging an appeal.
They sent a joint letter to the CMA in October arguing the deal would hand Tesco “incontestable power over the procurement of all grocery categories in the UK” but the authority have said their probe found no competition concerns despite rival wholesale groups’ fears.
The CMA said they “carefully” considered the impact on competition on convenience grocery stores supplied by Tesco – such as those that fall under Premier, Londis and Budgens chains – but found the Big Four grocers cannot have any direct influence.
“We have carefully listened to feedback from retailers and wholesalers who operate in what are highly-competitive UK retail and wholesale sectors,” said Simon Polito, the chair of the CMA’s inquiry group investigating the merger.
“Retailers have told us that they shop around for the best prices and service from their wholesalers, and we are confident that this will continue after Tesco buy Booker.”
However Steve Parfett, chairman of wholesalers AG Parfett & Sons who are part of Landmark Wholesale buying group, one of the seven signatories to the CMA objection letter, told Retail Gazette: “The whole decision is perverse.”
He added the group are now discussing obtaining legal opinion on whether to appeal inside the month allowed, and they have also sought the support of MPs in the constituencies where Booker have depots.
The CMA’s verdict this week follows the provisional go ahead that was provided in November after an investigation that was launched in May amid criticisms from across the grocery and convenience sector.
Tesco and Booker welcomed the decision and said the deal is now expected to complete next March.

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