Charles Wilson has hit out against a letter written by seven wholesalers and buying groups who joined together in attempt to block the Tesco-Booker merger.
Speaking to Better Wholesaling, Wilson said that some “backward” wholesalers are hoping that the sector will “stay cosy”.
The letter was published in a joint submission to the Competition and Market Authority (CMA), the body tasked with approving or rejecting the merger, and was co-signed by Martin Race, managing director at Bestway Wholesale, Andrew Selley, managing director at Bidfood, Nicky White, managing director at Confex, John Mills, managing director at Landmark Wholesale, Debbie Robinson, managing director at Spar UK, Philip Jenkins, managing director at Sugro, and John Schofield, managing director at Today’s Wholesale Services.
In response, Wilson told Better Wholesaling: “We appreciate all the fantastic support from our customers and suppliers [regarding the merger], and we’re grateful for that.
“However, there are a few wholesalers with their heads in the sand, and I can understand why some of the backward wholesalers are speaking to their lawyers.”
One signatory, Sugro’s Jenkins, said that the CMA’s investigation into the deal had overlooked the degree to which it would distort the marketplace.
Jenkins said: “The letter asks the CMA to take into account the findings of the supermarket commission, which highlights the imbalance between the high street and the wholesale market on pricing from suppliers due to the strength they hold with scale. Including Booker within that scale will most certainly create an imbalance within the wholesale marketplace.
“Additional services like Tesco Bank as well as the advanced technology that they can bring to the market with Clubcard points and online will provide additional commercial advantages that wholesalers would have difficulty matching – services that are available due to the scale of the high street over this sector.”
The group is being advised by a competition lawyer, and Jenkins confirmed that it would seek advice on what action could be taken if the CMA gives the merger the green light at the end of the month.
Booker, meanwhile, saw its total sales increase by 2.5% to £2.6bn in the 24 weeks to 8 September 2017. Non-tobacco sales were up by 7.5%, tobacco sales were down by 9% due to the changes in legislation, and pre-tax profit was up by 9% to £88m.
