Ex-Asda boss Andy Clarke ‘surprised’ by CMA's Tesco-Booker verdict

Clarke, who led Tesco’s big four rival for six years until June 2016, suggested the Competition and Markets Authority (CMA) had effectively declared “open season” on grocery M&A by concluding that the deal did not raise any competition concerns.

And he said the CMA ruling made “a nonsense” of the investigation process, when compared to other deals the body has previously called in.

Speaking at an event held by tech start-up Spoon Guru – which the ex-Asda chief executive now chairs – Clarke said: “I think we were all surprised by the first phase ruling. We wait until December to see the final decision, but I think we all expected [the CMA] to have a number of requests. For it to get a clean bill of health was quite surprising.

“I thought [the merger] was a very smart move by Tesco on two fronts – one, it gives them even more scale in convenience, and the second one is Charles [Wilson].

“So it’s clever, but I was surprised by the CMA’s ruling. When you think they called in Poundland [merger with 99p Stores], it makes a nonsense of it.”

“I think we were all surprised by the first phase ruling. I think we all expected [the CMA] to have a number of requests”

Andy Clarke, former Asda boss

Clarke was boss of Asda when it acquired Netto in 2010 and said the Walmart-owned grocer encountered a number of “challenges” to get that deal done.

But he believes the CMA’s phase one ruling on the Tesco-Booker merger could leave the door wide open for further grocery consolidation, and suggested the big four could eventually become three as a result.

According to the latest Kantar data covering the 12 weeks to November 5, Tesco holds 28% of the market, already some way clear of second-placed Sainsbury’s with 16.2% share.

Asda rakes in 15.3% of all grocery spend, while Morrisons is the UK’s fourth-largest grocer with 10.4% of the market.

Clarke said: “I’m sure there are many discussions going on around the country about whether four becomes three, because what the CMA have sort of said is: ‘it’s open season’.

“The combined shares of any of the other three, as a twosome, would be less than Tesco and Booker. Who would have ever thought that would be the case?”

Andy Clarke, former Asda boss

“Whether that’s the reality or not, I don’t know, but it makes you think that could be the case.

“The combined shares of any of the other three, as a twosome, would be less than Tesco and Booker. Who would have ever thought that would be the case?”

The CMA will reveal the findings of its phase two investigation into the deal by December 26.