The Press and Journal (Aberdeen and Aberdeenshire)
Tesco gets all-clear for £3.7bn buy of Booker
Retail: Competition watchdog happy
Tesco’s £3.7billion takeover of wholesale group Booker has been given a provisional green light after the competition watchdog said it would not lead to higher prices or hit service for shoppers.
The Competition and Markets Authority (CMA) said yesterday its in-depth investigation into the tieup did not raise concerns despite the fears of a raft of rival wholesalers.
It said Tesco and Booker did not compete “head-tohead” in most areas in which they operate, in particular the catering sector, where Booker makes more than 30% of its sales.
The provisional all-clear comes as a surprise, following the CMA’s earlier findings of more than 350 local areas of overlap between Tesco and Booker.
But a group of independent CMA panel members studied 12,000 locations where a branch of Tesco and a Booker-supplied shop were both present, and found competition would be strong enough to prevent price increases.
Inquiry chairman Simon Polito said: “The merger between Tesco and Booker will not lead to higher prices or a reduced service for supermarket and convenience shoppers.”
Tesco has more than 3,000 stores around the UK, while Londis and Budgens owner Booker is the country’s largest wholesaler.
Booker supplies more than 5,000 stores under the Premier, Londis, Budgens and Family Shopper brands, as well as thousands of independent retailers and caterers.
Rival wholesalers had raised concerns the deal could see Booker benefit from improved supplier terms, making it difficult for them to compete. They also argued that Booker could raise prices to the shops it supplies.
But the CMA said Booker was likely to pass on savings, adding: “This might increase competition in the wholesale market, as well as reducing prices for shoppers.”
Tesco said it looked forward to “creating the UK’s leading food business”.