Merger could put up prices for consumers, warns CMA
The takeover of Chippenham-based logistics firm Wincanton by the world’s largest haulier, US-based GXO, could reduce competition in the sector and raise prices for consumers, according to the competition watchdog.
An investigation by the Competition and Markets Authority into the £762 million acquisition has found the deal could reduce competition and drive up prices for businesses that rely on contract logistics suppliers to move their goods around the UK.
In turn, this cost could be passed on to consumers, pushing up prices in the retail sector, warns the government watchdog.
The CMA’s investigation found that GXO and Wincanton currently compete closely – particularly for contracts with large retail customers.
Although GXO will continue to face competition from other contract logistics providers, many of these are significantly smaller, or focus on specific industries or types of logistics services, the investigation found.
GXO has until Friday (November 8) to address the CMA’s concerns.
If suitable proposals are not submitted, the CMA will progress to an in-depth Phase 2 investigation.
GXO announced its deal to acquire Wincanton in February 2024. The deal was then completed in April 2024, although an interim enforcement order is in place to prevent the two organisations integrating while the CMA conducts its merger review.
Naomi Burgoyne, senior director of mergers at the CMA, said: “Contract logistics services are critical for the flow of goods around the country, reducing delays, and ensuring that products reach their destinations efficiently and reliably.
“These services are essential for millions of people who rely on timely deliveries or being able to buy products off the shelf.
“This market is worth £16 billion in the UK, and we’re concerned that this merger could reduce competition, resulting in higher costs being passed down to consumers.
“We consider that these competition concerns warrant an in-depth Phase 2 investigation, unless GXO offers solutions which address them.”
Find out more about Wincanton here: https://www.wincanton.co.uk/
https://couriernews.co.uk/blog/wincanton-merger-could-put-up-prices/