The Competition Markets Authority (CMA) has said today that it believes the merger between Tesco and Booker could harm competition and will now commence a 24-week in-depth probe.
The news follows a request from Tesco and Booker to “fast track” the investigation which was accepted by the CMA.
Pledging to publish its final report before Christmas, the investigation will now enter a new phase with an inquiry group chosen from an independent set of panel members.
They will assess whether competition in up to 350 local areas could indeed be effected by the proposed merger, seeking evidence from all those parties that could be harmed.
The CMA has raised 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 deal has come under scrutiny from shareholders at Tesco, who are concerned it could act as a distraction from focusing on a financial turnaround for the grocer.
A Tesco spokesperson said: “We are pleased that the CMA has accepted our fast track request, and we look forward to continuing our engagement over the coming months.
“This merger has always been about growth, and we remain convinced that it will bring benefits for consumers, independent retailers, caterers, small businesses, suppliers and colleagues.”