Green light for Woolworths merger

24-07-2007

Green light for Woolworths merger
Woolworths has been given the provisional go-ahead to acquire the book wholesaler Bertram Group.

The Competition Commission has cleared the merger this morning after deciding there were no major competition issues raised by the move.

It follows an investigation into whether the completed acquisition would have resulted in the combined company being able to exert undue influence on the book industry.

Woolworths' Entertainment UK arm bought Bertram in February for £28.9 million, but concerns raised by a number of smaller booksellers led to the inquiry.

Inquiry chairman Diana Guy said: "We have looked carefully at the various ways in which books are supplied to retailers, both from wholesalers and direct from publishers through their distributors.

"Even for independent bookshops who tend to buy more from wholesalers than other types of retailers, we found that the ability of the merged company to exploit its position by lowering the available discounts or degrading their service levels will be limited."

She added that fellow wholesaler Gardners remains a "strong competitor" in the sector and that "there is scope for booksellers to divert at least some orders to direct supply".

"We found that Woolworths' plans to develop the sale of books through its own stores would not influence its incentives to supply other retailers," she said.

"Additionally, Woolworths' involvement in the supply of books to libraries have been so limited until now that no adverse effects can be expected from the merger."

The commission says it now wants interested parties to contact it in relation to the provisional findings, a full report on which will be published later this week.

The final report is due in early September.


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