Tesco's £3.7bn takeover of Booker will be the subject of an in-depth investigation, UK competition authorities announced this morning.
The Competition and Markets Authority (CMA) opened an initial "phase 1" into the deal in May. Today's announcement follows a request by the companies to fast track the investigation.
In its initial findings, the CMA identified more than 350 areas with an "overlap between Tesco shops and Booker-supplied ‘symbol’ stores, [meaning] shoppers could face worse terms when buying their groceries".
It added in a statement:
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 phase 2 investigation will be led by a separate team selected from an independent panel. It will conduct further research and seek additional views and evidence on the deal.
The panel has 24 weeks to deliver a final report on the transaction, meaning it will be published before Christmas.