The proposed merger between Tesco and Booker, which supplies the Premier, Londis and Budgens brands, is being referred for an in-depth, phase 2 investigation by the Competition and Markets Authority (CMA).
The CMA opened its phase 1 investigation into the merger in May. At the end of June, the companies requested a ‘fast track’ referral to the next stage of the investigation.
In a statement the CMA said it believed that in more than 350 local areas where there is currently an overlap between Tesco shops and Booker-supplied ‘symbol’ stores, shoppers could face worse terms when buying their groceries.
There are concerns that, after the merger, there is 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 investigation will now pass to a new set of decision makers – an inquiry group chosen from the CMA’s independent panel members.
This group will assess whether the deal could reduce competition by conducting further research and analysis as well as seeking views and evidence from all those potentially affected by the merger.
The statutory timetable for the in-depth phase 2 investigation is 24 weeks, which means the final report will be published before Christmas – following an earlier provisional findings report.