The Competition and Markets Authority (CMA) has cleared the
merger between contract logistics services providers, GXO and
Wincanton – subject to the sale of Wincanton's dedicated grocery
warehousing business to a CMA-approved buyer.
In its final report, the
independent inquiry group leading the CMA's investigation found
that GXO's purchase of Wincanton would reduce competition in the
supply of dedicated warehousing services to grocery customers in
the UK.
The loss of competition would likely lead to higher costs for
grocers which, in turn, could be passed onto shoppers across the
UK and lead to more expensive products at the checkout. The loss
of competition resulting from the deal could hamper innovation
and reduce service levels in the market – impacting the
efficiency of goods reaching supermarket shelves.
As a result, GXO has agreed to sell Wincanton's dedicated grocery
warehousing business to a CMA-approved buyer. The inquiry group
is satisfied that this remedy sufficiently addresses its
competition concerns and is therefore clearing the
deal.
Logistics, including warehousing, is essential to the operation
of supermarkets and many other businesses in the UK. Efficient
logistics systems help to lower costs for both businesses and
consumers and ensure that products are available in stores when
needed.
Richard Feasey, Chair of the independent inquiry group,
said:
Warehousing services play a crucial role in ensuring the seamless
movement of goods across the UK, allowing our supermarkets to
maintain well-stocked shelves with thousands of items we buy
every day.
Healthy competition in this market is key to managing costs for
supermarkets and grocers and improving their performance –
ultimately ensuring consumers pay the best possible prices for
products in stores. We are pleased to approve this deal, having
worked with GXO and Wincanton to secure the necessary changes to
the deal which resolve our concerns.
For more information, visit the GXO / Wincanton case
page.
Notes to Editors:
-
Alongside publishing the final report, the CMA has also
issued an interim order to permit GXO and Wincanton to begin
integration once Wincanton's dedicated grocery warehousing
business has been appropriately ringfenced, pending its sale
to a suitable CMA-approved buyer.
-
The independent inquiry group's final report will be
published on the GXO / Wincanton
case page in due course.
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Contract logistics services (CLS) encompass a range of B2B
and B2C supply chain-related services, which enable
businesses to supply goods to customers and consumers. These
services include transport and distribution, warehousing and
additional value-added services.
