Sources close to the UK’s competition watchdogs have suggested the proposed partnership between Tesco and French giant Carrefour will avoid the sort of scrutiny it is getting across the channel.
The Grocer understands the CMA does not plan to investigate the proposed coalition, despite fears that it will pile yet more pressure on suppliers already hit by the Tesco/Booker merger and facing the proposed coming together of Sainsbury’s and Asda.
A source said the CMA did not currently regard the proposals for a long-term “strategic alliance” as something which could lead to a serious lessening of competition in the UK.
That is despite Tesco and Carrefour working on plans for “relationships with global suppliers” and on the “joint purchasing of own-brand products” as both look to reduce costs.
On the other hand, Grocery Code Adjudicator Christine Tacon could potentially become involved in policing Carrefour and Tesco if the combined activity affected goods for sale in the UK, another competition source suggested.
The source said: “At this stage it is very hard to say whether the GCA would become involved. It’s a complex situation and a lot of detail has to come out yet about how Tesco and Carrefour plan to operate their relationship. The Adjudicator would also not become involved in issues surrounding prices.”
The stand-off in the UK is in stark contrast to France, where competition authorities this week announced they would be probing the planned coalition as part of an investigation into a string of buying alliances.
The Autorité de la concurrence said it would explore “the competitive impact of these purchasing partnerships on the concerned markets, both upstream for the suppliers and downstream for the consumers”.
Earlier this month Tesco and Carrefour announced plans to enter a long-term ‘strategic alliance’ which will see them work together on “relationships with global suppliers” and on the “joint purchasing of own-brand products” as both look to reduce costs.
The move comes with the CMA poised to investigate a proposed merger between Asda and Sainsbury’s - having approved the coming together of Tesco and Booker earlier this year - and again throws the spotlight on the impact on suppliers of consolidation in the retail and wholesale sectors.
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