Thursday, 2 November 2017

CMA Delays Revealing Provisional Decision On Tesco’s Proposed Takeover Of Booker

Having originally said it would publish details by the end of October, the CMA yesterday altered its administrative timetable to say the provisional findings would be available ‘early/mid November’. (More)
  • Continued uncertainty means suppliers to Booker revert to short-term mode in terms of dealings with Booker…
  • …and the rest of the wholesale sector.
  • Whilst at the same time anticipating further consolidation in UK wholesale.
  • i.e. reducing the possibility of prices and terms discrepancies…
  • But if the deal goes ahead, be prepared to offer Tesco-Booker terms to all wholesalers.

The unintended consequences of an unprecedented merger:
  • This issue is not about increased Tesco buying power (Booker would add 10% to Tesco purchases)
  • The real issue is that Booker will be able to avail of Tesco buying terms, resulting in unmatchable competition for wholesalers not so privileged…
  • Time for suppliers to conduct what-ifs on supplying all wholesalers on Tesco terms?
  • Or watching Tesco-Booker grow at the expense of other wholesalers - same difference?
  • Or other wholesalers being taken over by other mults? - almost same difference?

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