UK Largest Food Tesco-Booker competition inquiry begins

The Competition and Markets Authority will assess whether the tie-up could reduce choice for shoppers and for small stores supplied by Booker.

Booker is the UK's largest food wholesaler and also owns the Premier, Budgens and Londis store brands.

The deal was announced in January, with Tesco and Booker saying it would create the "UK's leading food business".

Despite rising

competition from the likes of Aldi and Lidl, Tesco remains Britain's biggest supermarket with 27.6% of the market in the three months to March, according to Kantar Worldpanel. That was down slightly from the 28.1% for the same period last year.

The CMA has announced the first phase of its investigation into the deal which will run until 25 July. It has asked for interested parties to submit their views by 13 June.

After this first phase, the CMA will either clear the takeover or submit it for a more in-depth investigation, unless Tesco and Booker take steps to counter any competition issues identified.

When the deal was announced, Tesco and Booker said they did not expect it to be completed until late 2017 or early 2018, suggesting both companies expected closer scrutiny from the watchdog.

As well as raising concerns over competition issues, Tesco's move for Booker has also been criticised by some of its shareholders.

In March, one of Tesco's biggest investors, Schroders, warned about the cost of the deal, telling the BBC that the supermarket giant was paying a "premium" and it had "major concerns" about the deal.

Tesco shares were d