Hammer blow for Tesco £3.7bn food takeover

TESCO’S £3.7bn takeover of cash-and-carry firm Booker has been hit by a hammer blow after competition watchdogs launched an inquiry.

The Competition and Markets Authority said the merger could leave customers in 350 areas worse off and warned shoppers could face higher prices.

It said it was concerned that, after the merger, Booker would cut wholesale services to stores – driving customers to their local Tesco. The proposed deal would turn Tesco, Britain’s biggest retailer, into a major supplier to small retailers, serving 125,000 independent stores and 468,000 restaurants and pubs.

The CMA now has 24 weeks to do an assessment of whether the transaction will reduce competition. It will issue provisional findings before publishing a final report by Christmas.