Merger will not be referred to Competition Commission
The Office of Fair Trading has decided not to refer the proposed merger of Boots and Alliance UniChem to the Competition Commission, provided that 'satisfactory undertakings to address the competition concerns arising from the supply of retail pharmacy services in certain localities in the UK' are given.

If the parties do not give such undertakings, then the transaction will be referred.

'This is a market in which Government regulations restrict competition by imposing barriers to new market entrants. As a result, cost savings arising from this merger may not be fully passed on to consumers in the form of enhanced services,' said OFT chief executive John Fingleton. 'There remains a strong case for the Government to reconsider the costs to consumers of maintaining these disproportionate restrictions on competition in the retail pharmacy sector.'

OFT competition enforcement director Vincent Smith added: 'The loss of rivalry between a Boots and UniChem pharmacy in a local area could give rise to competition concerns. This merger raises the realistic prospect of a substantial lessening of competition in about 100 local areas. However, Boots has offered divestment undertakings for all of these areas and the OFT is satisfied that these will address its concerns.'

Topics