Farmers have expressed concern over the proposed merger between Tesco and Booker group, which operates the nation’s largest chain of wholesalers, supplying caterers and shops, and also owns three large convenience store companies.

Booker owns Premier, Londis and Budgens stores, and was linked with Tesco in a £3.7bn deal on Friday morning.

Though Tesco has seen its market share decline in recent years, having faced competition from discount retailers and been embroiled scandals over horsemeat and accounting (which saw three former senior directors charged with fraud in 2016), Tesco remains the UK’s biggest retailer, controlling 30% of the grocery market.
 
On Friday, Tesco’s CEO Dave Lewis said he didn’t envisage any challenge from competition authorities, but analysts pointed to the competition between Tesco’s One Stop convenience stores and those owned by Booker. The Farmers’ Union of Wales (FUW) has also highlighted farmers’ concerns around a further concentration of power in the grocery supply chain.

FUW Policy Officer Charlotte Priddy, said, “There are already well recognised concerns regarding the balance of power along the supply chain being loaded in favour of major retailers, so any moves which increase such imbalances are a great worry.”

Mrs Priddy said there were also concerns the merger could have a particularly acute effect over some local supply chains where those companies were the main retailers.

“The FUW will be monitoring the situation to see what impact it could have on farmers, and we would want to see the Competition and Markets Authority consider the merger carefully.”



The Union reiterated its backing for the Groceries Code Adjudicator, which was formally established in 2013 to ensure supermarkets treat their suppliers lawfully and fairly. Responding to the statutory review of the office, farmers’ groups have called for the adjudicator’s powers to be expanded, allowing the watchdog to take evidence from new sources, and act in the interest of indirect suppliers of the large retailers.