CC set to clear Booker / Makro merger
14 Mar 2013
The Competition Commission (CC) has provisionally cleared the completed acquisition by Booker Group PLC (Booker) of Makro Holding Limited (Makro).
Booker and Makro are both national cash-and-carry wholesalers supplying a range of food, drinks, grocery and non-food products to independent retailers and caterers. Booker operates 172 stores whilst Makro has 30 stores. The cash-and-carry market is worth an estimated £11 billion a year in the UK.
In a summary of its provisional findings published today, the CC has concluded that the merged company would continue to face sufficient competition from other wholesalers—both cash-and-carry and delivered—in all areas affected by the merger. The CC therefore believes that the existing and potential alternatives offered by other suppliers will ensure that the merger does not lead to a substantial lessening of competition.
Simon Polito, CC Deputy Chairman and Chairman of the Booker/Makro inquiry, said:
‘The wholesaling market is complex, diverse and dynamic. Our evidence points to the fact that customers can and do switch between different types of wholesalers, so we looked closely at all the areas where Booker and Makro stores currently overlap to see what other sources of supply would remain. In all the areas we looked at, Booker would continue to face competition from national, regional or local wholesalers so we don’t believe customers will face higher prices, lower-quality service or other issues as a result of the merger.’
The CC found that although the parties can vary prices locally in response to competition, profitability does not markedly increase in areas with limited cash-and carry competition, underlining that other types of wholesaler do provide an alternative for customers. The CC believes that in the absence of the takeover by Booker, Makro would most likely have ceased trading and its properties sold to various parties.
The Office of Fair Trading (OFT) referred the case on 8 November 2012. The CC will consider responses to the provisional findings before publishing its final report. The CC is expected to publish its final report by 24 April 2013.
The provisional findings summary and other information on the investigation are available at: www.competition-commission.org.uk/our-work/booker-makro. The full provisional findings report will be published shortly.
The CC would like to hear from all interested parties in writing about the provisional findings by 4 April 2013. To submit evidence, please email booker-makro@cc.gsi.gov.uk or write to:
Inquiry Manager
Booker/Makro merger
Competition Commission
Victoria House
Southampton Row
LONDON
WC1B 4AD
Notes for editors
1. The CC is an independent public body, which carries out investigations into mergers, markets and the regulated industries.
2. The members of the Inquiry Group are: Simon Polito (CC Deputy Chair and Chairman of the Group), Jeremy Peat, Tony Stoller and Jonathan Whiticar.
3. The Enterprise Act 2002 empowers the OFT to refer to the CC completed or proposed mergers for investigation and report which create or enhance a 25 per cent share of supply in the UK (or a substantial part thereof) or where the UK turnover associated with the enterprise being acquired is over £70 million.
4. The CC has a 24-week period in which it is required to publish its report, which may be extended by no more than eight weeks if it considers that there are special reasons why the report cannot be published within that period.
5. Further information on this inquiry, including the terms of reference and other key documents, as well as on the CC and its procedures, including its policy on the provision of information and the disclosure of evidence, can be obtained from the CC website at: www.competition-commission.org.uk.
6. Enquiries should be directed to Rory Taylor or Siobhan Allen or by ringing 020 7271 0242.
