The Tesco-Booker merger has been given the provisional go-ahead by the Competition and Markets Authority (CMA).
The CMA, which took evidence from 65 wholesalers, concluded that Tesco’s purchase of Booker “does not raise competition concerns,” and that the wholesale market would “remain competitive in the longer term,” as Booker’s share of the UK grocery wholesaling market – at less than 20% – was not “sufficient to justify the longer-term concerns.”
The body also ruled that Tesco and Booker don’t compete head-to-head in most of their activities, adding that Tesco does not supply the catering sector to which Booker makes over 30% of its sales.
A Booker spokesperson said: “We are pleased that the CMA has provisionally concluded that this transaction does not lessen competition, and will continue to work with the CMA ahead of its publication of a final decision, expected in December.
“We are grateful for the support of customers, suppliers and colleagues during this process.”
In October, seven of the UK’s leading wholesalers wrote a joint letter to the CMA urging it to block the merger, refuting the claim that the acquisition would enhance competition in the UK and promote consumer interests.
In response, Booker CEO Charles Wilson told Better Wholesaling that some “backward” wholesalers are hoping that the sector will “stay cosy”.
“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,” he added.