CMA – Tesco / Booker a provisional go

Tesco’s planned acquisition of grocery and corner shop chain Booker has been provisionally cleared by the government’s Competition and Markets Authority (CMA).

In a statement the CMA said that its panel of independent experts “found that Tesco as a retailer and Booker as a wholesaler – supplying to caterers, independent and symbol group retailers including Premier, Londis and Budgens – do not compete head-to-head in most of their activities”.

Simon Polito, Chair of the inquiry group, commented: “Our investigation has found that existing competition is sufficiently strong in both the wholesale and retail grocery sectors to ensure that the merger between Tesco and Booker will not lead to higher prices or a reduced service for supermarket and convenience shoppers.”

When Tesco set out its rationale for the merger earlier this year, the company said: “Optimising a joint national distribution system of Tesco and Booker is expected to lead to material benefits, including sharing parts of the fleet and expanding click and collect services. Tesco also anticipates savings in relation to final mile delivery to customers.”

Tesco is in it for the huge potential for access to thousands of click & collect points around the UK. This will extend its reach considerably and help its online retail business. What the CMA demands – ie, what has to be sloughed off to make it possible – will shape the final deal.
 
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