CMA raises competition concerns over Tesco and Vision Express merger
Three local areas have been identified where price increases for customers could occur
The Competition and Markets Authority (CMA) has raised concerns over the planned purchase of Tesco Opticians by Vision Express.
During a phase one investigation into the merger of the companies, the CMA identified three local areas where Vision Express would not face sufficient competition after the deal is completed.
The CMA said that customers in Barrow-in-Furness in Cumbria, Helston in Cornwall, and Ryde on the Isle of Wight could face price increases or a reduction in the choice of the products and services in-store.
Senior director at the CMA and case decision maker, Adam Land, explained: “Opticians provide a vital service for millions of people in the UK and it is therefore important that any competition concerns are addressed.”
Vision Express now has until 5 October to address the concerns identified. If the multiple does not sufficiently address the CMA’s concerns, the merger will be referred for further investigation.
The multiple expressed its intention to avoid referral to a phase two investigation to “avoid prolonging uncertainty for all of the parties involved.”
CEO at Vision Express, Jonathan Lawson, explained: “We are now working on undertakings to allow the CMA to clear the acquisition so we can move forward with integrating Tesco Opticians into our estate.”
“We argued strongly for unconditional clearance and we will place a high priority on ensuring a smooth transition for our employees and customers as we work through the process,” he added.
GrandVision, owner of Vision Express, reported in its 2017 half-year results in August that the company expects to complete the acquisition of 209 Tesco stores in the final quarter of 2017, taking its total to over 598 practices.
AOP board member and independent practice owner, Gordon Ilett, said he was pleased to see that the CMA are ensuring that “larger corporate groups” do not stifle competition.
“The intention by CMA to launch a further inquiry demonstrates that they recognise the importance of diversity and consumer choice in the retail optical market,” he said.