Tesco’s rivals slam watchdog over £3.7bn Booker deal

TESCO’S £3.7 billion power grab to buy wholesale supplier Booker could destabilise the whole grocery market and severely diminish competition, rival food operators fear.

The Competition and Markets Authority said earlier this year that its investigation into the deal would mainly concentrate on its potential effect on local competition rather than on issues relating to Tesco’s increased buying abilities.

Bestway Cash & Carry, which has a turnover of £2.3 billion, has raised grave doubts about the acquisition.

It accused the CMA of failing to address Tesco’s potential domination over the food, wholesale and convenience store sector.

Bestway, which is half the size of Booker, said: ‘We believe the proposed merger will have a major impact and significantly distort competition.’

The firm fears the deal could allow Tesco to haggle down prices by threatening to stop stocking certain products which could then force suppliers operating on thin profit margins to raise prices for other customers in order to meet targets.

The company strongly urged the CMA to reconsider its proposed approach and to ensure it properly investigates the potential increase in Tesco’s buying power.

Last month, Steve Parfett, chairman at £300 million wholesale business Parfetts, said the CMA’s investigation had ‘badly missed the point’.