Wholesale experts have called on the industry to lobby the Competitions and Market Authority (CMA) over the proposed Tesco-Booker merger amid claims it will destabilise the retail grocery market and leave customers worse off.
Steve Parfett, chairman of Parfetts, is among several voices calling on the sector to unite in opposition to the deal, which he called “one of the most difficult problems in my whole career”.
Mr Parfett’s main criticism of the CMA is its focus on investigating the least harmful aspects of the merger, sidelining issues such as the potential abuse of buying power.
“Tesco cost prices will, on day one, be available to Booker and they will have an enormous price advantage over the rest of the wholesale sector,” he said.
“People like ourselves and Bestway have been vociferous in our opposition, but others are nervous about putting their heads above the parapet.
“People feel there is a danger that by speaking out we are saying our company is in a weak position, but that’s not the case. This is a threat to the whole industry and I passionately believe it should be stopped.”
In a LinkedIn article published at the weekend, Tony Salisbury, retired managing director at AF Blakemore, said: “The Tesco-Booker deal is very wrong and dangerous to the competition, not just for the wholesale industry but to customers. There needs to be as many people as possible on board before the CMA makes its final decision. Keeping quiet must not be an option.”
One wholesaler, who did not want to be named, confirmed he had already been approached about heading up a pressure group, telling RN: “There is talk of a loose coalition, which I would support.”
The CMA announced a Phase 2 investigation into the merger in July, with the investigation’s primary concern cited as the lessening of competition between stores owned by Tesco and Booker. The authority is due to report its findings before Christmas.
A CMA spokesman said: “We stand by the objectives laid out in our issues statement, all of which are essential to investigating the merger. An examination into the ‘potential negative impact of an increase in buyer power’ forms a significant part of the inquiry.”