Friday, October 20, 2017

Pressure mounts for inquiry into Tesco-Booker deal ahead supplier’s financial results

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Calls for a competition inquiry into the Tesco-Booker merger have intensified ahead of the release of Booker‘s fourth quarter trading update.

The £3.7 billion merger has been met with controversy as rival retailers argue it could breach competition laws.

Andy Higginson, former finance director at Tesco and current chairman at Morrisons has become the latest figure to voice his concerns over the landmark deal, stating it would “exert even more power over thousands of retailers”.

He joins leading retail voices like Ocado chairman Lord Stuart rose who told the Sunday Times: “The Competition and Markets Authority (CMA) will be all over it like a rash, and they should be.

“The small shopkeepers are now effectively going to be supplied by Tesco.”


READ MORE: Tesco Booker deal under scrutiny as study reveals promises weren’t kept


Steve Parfett, head of grocery wholesaler AG Parfett and Sons also told The Grocer: “I have spent the last 20 years predicting that one day a major retailer would acquire a major wholesaler, as has happened in many other markets.

“Already one of the most profitable wholesalers, it could both treble its profits and decrease prices by anything up to 10 per cent. Such a market shock is both unsustainable and inequitable.”

The CMA is expected to launch an investigation into the deal in the near future, despite Tesco and Booker downplaying criticisms.

Meanwhile, Booker is poised to release a trading update for its last financial quarter, revealing whether it managed to maintain its 3.2 per cent sales rise seen in the third quarter.

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