The UK's competition watchdog is to conduct an in-depth investigation into the £3.7 billion merger between Tesco and Britain's food wholesaler Booker.
The Competition and Markets Authority (CMA) said on Wednesday that it believed competition could be harmed in more than 350 local areas where there is an overlap between Tesco shops and Booker “symbol stores”.
Booker is Britain's largest wholesaler and owns Londis and Budgens as franchised outlets, and the CMA is concerned that shoppers could face worse terms when buying their groceries as a result of the deal.
The watchdog added that there were concerns over the “potential for Booker to reduce the wholesale services or terms it offers the ‘symbol’ stores it currently supplies, in order to drive customers to their local Tesco”.
The CMA now has 24 weeks to conduct its probe and pledged to publish its final report before Christmas, after an earlier provisional findings document is released.
Tesco is Britain’s biggest retailer, while Booker is the UK’s largest cash-and-carry operator with about 13,000 staff and about 200 stores.
Tesco has faced criticism from investors over the deal, with some shareholders branding the takeover tilt a "distraction" and urging the Big Four grocer to scrap it. – (PA)
