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NPA seeks assurances over Tesco-Booker deal

28th Jan 2017 / By Alistair Driver

The NPA will be seeking assurances about the impact of Tesco’s takeover of Booker on the pork supply chain.

tesco bookerTesco chief executive Dave Lewis (pictured left with Booker's Charles Wilson) said the retailer's £3.7bn takeover of the UK’s largest food wholesaler and owner of Londis and Budgens would create the ‘UK’s leading food business’. He said the move would benefit consumers, small retailers, suppliers and shareholders.

However, there is concern within the NPA that this further concentration of power within the supply chain could have a negative impact on pig producers.

NPA chief executive Zoe Davies questioned whether the link between Tesco, one of the toughest players in the retail market, and a major wholesaler could put further pressure on pig producers.

"We will seek assurance this does not create greater imbalance in the supply chain," she said. 

NPA vice chairman Richard Longthorp pointed out that were Budgens were historically good supporters of British pork, while Londis was an 'Aldi/Lidl type operation', although more focused at the convenience store end of the range. Booker, itself, could be Tesco’s entry to food service, he added.

He raised the question of whether the retailer might try to brand its acquisitions as Tesco.

In the latest AHDB Porkwatch survey, Tesco was again confirmed as one of worst supporters of British pigmeat, second obly to Asda among the top 10 retailers in terms of the percentage of pigmeat it imports for its stores. 

What they said about the deal

Mr Lewis said: "Tesco has made significant progress in turning around our UK retail business. This Merger with Booker will further enhance Tesco's growth prospects by creating the UK's leading food business with combined expertise in retail, wholesale, supply chain and digital. Wherever food is prepared and eaten - 'in home' or 'out of home' - we will meet this opportunity with the widest choice and best service available."

Charles Wilson, Chief Executive Officer of Booker said:"Booker is committed to improving choice, prices and service for the independent retailers, caterers and small businesses that we are proud to serve. We believe that joining forces with Tesco offers the potential to bring major benefits to end consumers, our customers, suppliers, colleagues and shareholders."