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UK CMA provisionally clears Tesco/Booker merger

RBR Staff Writer Published 15 November 2017

The UK' s Competition and Markets Authority (CMA) has provisionally cleared Tesco/Booker merger after in-depth review, saying that the purchase does not raise competition concerns.

The CMA says that after taking evidence from Tesco and Booker and also from more than 65 wholesalers, suppliers and retail chains and a survey of hundreds of retailers, it has concluded that the merger poses no threat to retail competition in the country.

The regulatory body also found that Tesco is a retailer and Booker is a wholesaler which supplies mainly to caterers, independent and symbol group retailers including Premier, Londis and Budgens. So, they do not compete with each other in most of their activities and moreover Tesco does not supply to the catering sector, where Booker makes more than 30% of its sales.

It concluded that the wholesale market will remain competitive in the long run, as Booker’s share of UK grocery wholesale market is less than 20%.

Simon Polito, Chair of the inquiry group, said: “Millions of people use their local supermarket or convenience store to buy their groceries or essentials. Strong competition in the market ensures that shoppers can choose the best deal for them.

“Our investigation has found that existing competition is sufficiently strong in both the wholesale and retail grocery sectors to ensure that the merger between Tesco and Booker will not lead to higher prices or a reduced service for supermarket and convenience shoppers.”

The proposed deal is expected to transform one of Britain’s largest retailer into a supplier to 125,000 shopkeepers, independent convenience stores along with 468,000 restaurants and pubs.

Last month, CMA was urged by UK’s leading retailers to block the deal which could put them out of business.

Image: Tesco’s merger with Booker receives approval from the CMA. Photo: Courtesy of Tescoplc.com.