Balance of power: Farmers express concerns behind Tesco deal to buy Brooker

The firms said the deal would create the 'UK's leading food business'
The firms said the deal would create the 'UK's leading food business'

Farmers have expressed concern about the announcement that Tesco is to buy Booker, the UK’s largest food wholesaler and the company behind Londis and Budgens, in a £3.7bn deal.

The firms said the deal would create the 'UK's leading food business'.

But Farmers Union of Wales (FUW) Policy Officer Charlotte Priddy said there are already 'well recognised' concerns regarding the balance of power along the supply chain being loaded in favour of major retailers.

She said: “Any moves which increase such imbalances are a great worry.”

Mrs Priddy said there were also concerns the merger could have a particularly acute effect over some local supply chains where those companies were the main retailers.

The Union previously welcomed the establishment of the Groceries Code Adjudicator, which was formally established in 2013 to ensure supermarkets treat their suppliers lawfully and fairly.

“The FUW will be monitoring the situation to see what impact it could have on farmers, and we would want to see the Competition and Markets Authority consider the merger carefully.”

National Pig Association 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.

In a joint statement, the two companies said that the combined group would bring benefits for consumers, independent retailers, caterers, small businesses, suppliers, and colleagues, and deliver 'significant value to shareholders'.