£3.7bn Booker-Tesco merger cleared by CMA

20-Dec-2017 - Last updated on 20-Dec-2017 at 09:35 GMT

Come together: the merger was first announced in January this year

The Competition and Markets Authority (CMA) has concluded that Tesco’s purchase of Booker does not raise competition concerns.

The £3.7bn deal was first announced at the beginning of the year (January) and both companies claimed it would provide a better availability of food and help independent businesses by improving price, service and availability.

CMA panel members examined how the UK’s largest grocery retailer and the UK’s largest grocery wholesaler, which supplies the pub industry, would impact competition.

Booker boss Charles Wilson said of the deal earlier this year: “By joining forces with Tesco, it will help us improve the choice, quality, price and service for the customers [including pubs] we serve."

Efficient business

He added: “We can do some ready meal development, which Booker hasn’t been able to do. With pricing, we can become a more efficient businesses and pass some of that back to the customers.”

He also outlined how Booker was hoping to expand even further by offering its customers the chance to order on the go.

Wilson added: “If customers can pay with an app like PayQuiq (Tesco payment app), which is a tap-and-pay solution that could work really well for pubs and allow Tesco consumers to redeem their Clubcard points.

“So there are all sorts of exciting opportunities we see as being part of the larger group, which will allow us to offer a better choice, quality, price and service to our customers and therefore, help them grow.”

Evidence examined

Chair of the inquiry group Simon Polito 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 continue after Tesco buys Booker.

“This has been an important investigation for us. Millions of people use their local supermarkets or convenience store to buy their groceries or essentials so it is vital they have enough choice to secure the best deal for them.

“Having examined the evidence in depth, we are satisfied this will remain the case following the merger.”