Booker and Tesco’s £3.7bn merger has officially been granted permission by the Competition and Markets Authority (CMA).
Following months of speculation, whereby top UK wholesalers vehemently petitioned against the acquisition insisting that it would distort the market, the CMA has concluded that “Tesco’s purchase of Booker does not raise competition concerns”.
The CMA justified its choice by stating that Booker does not own the shops it supplies, thus retailers are free to pick prices themselves and decide what products to stock, adding: “So, although these shops compete with Tesco, Booker cannot directly determine how they compete”.
The body also examined whether the merger would raise prices or reduce service quality at wholesale or retail levels, and found that existing strong competition in wholesale and retail made this unlikely.
Simon Polito, chair of the CMA inquiry group, said: “We have carefully listened to feedback from retailers and wholesalers who operate in what are highly competitive UK retail and wholesale sectors. Retailers have told us that they shop around for the best prices and service from their wholesaler, and we are confident that this will continue after Tesco buys Booker.”
