Seven of the UK's top wholesalers have expressed concern over the potential £3.7 billion merger between retail giant Tesco and food wholesale group Booker.
The UK's Competition and Markets Authority (CMA) is currently conducting an investigation to assess whether this deal could reduce competition and choice for shoppers.
Representatives from Today, Spar, Bestway, Bidfood, Landmark, Confex and Sugro told the CMA they were 'concerned over the increased buying power' that the merged company would have if the deal were to be approved.
They said that it would be likely that Booker would benefit from the lower prices currently available to Tesco, which are not available to others, making it 'very challenging for other wholesalers to compete'.
There was also a concern that once the companies had merged, Tesco/Booker may become the 'preferential customer for suppliers', meaning that they would have preferential access to seasonal or limited stock.
Continued Investigation
Tesco first announced the merger with Booker in January 2017, with chief executive Dave Lewis saying that the acquisition would create "the UK's leading food business". Originally the deal was set to be completed by late 2017 or early 2018.
However, in July the CMA confirmed that it was conducting an in-depth investigation into the merger. Provisional findings are expected to be made by the end of this month, with a final report by the end of the year.
Earlier this week, Tesco posted its seventh consecutive quarter of growth, with a 0.7% increase in group sales in the first half of its financial year.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
