The Competition and Markets Authority (CMA) independent inquiry group’s initial assessment is that GXO’s purchase of Wincanton is likely to reduce competition in the supply of dedicated warehousing services to grocery customers in the UK.
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.
GXO and Wincanton are currently two of the three suppliers of dedicated warehousing services used by grocers in the UK. The inquiry group considers that some alternatives would remain for supermarket customers following the transaction, in particular they could switch to the third supplier, DHL, and some could switch some of their activities to their own in-house warehouses. The inquiry group’s initial assessment, however, is that these remaining alternatives would not be sufficient to prevent fees rising and that the deal could raise costs for grocers that rely on dedicated warehousing services as part of their logistics.
Richard Feasey, Chair of the independent inquiry group, said:
“Contract logistics services play a critical role in ensuring that supermarket shelves are fully stocked for customers in the UK every day of the year. Our initial view is that this merger could raise the costs of these services and reduce choice for supermarkets who rely on these services for moving goods across the country.
“We want to ensure competition in this market is working as well as it can to manage costs for supermarkets and grocers, and ensure products continue to reach supermarket shelves efficiently.”
