- CMA identifies 13 areas where the merger could cause a “substantial” decrease in competition
- LloydsPharmacy struck a deal to acquire 277 of Sainsbury’s in-store pharmacies
- Lloyds parent Celesio may have to sell existing pharmacies for the bid to go ahead
LloydsPharmacy could have to sell stores as a result of competition concerns as it looks to acquire Sainsbury’s pharmacy business.
LloydsPharmacy may have to sell outlets in 13 areas across the UK, including Leeds and Liverpool, for its bid on Sainsbury’s units to be signed off by the Competitions and Markets Authority (CMA).
The CMA, which launched an investigation into LloydsPharmacy’s merger with Sainsbury’s in December, has found that the bid “would be expected to lead to a substantial lessening of competition” in affected areas.
Sainsbury’s sold its pharmacy estate, comprising 281 outlets, 277 of which were in-store and four of which were located in hospitals, to LloydsPharmacy last July.
The CMA inquiry chair Simon Polito said: “We found evidence that there were some differences in the characteristics of Sainsbury’s and LloydsPharmacy customers, but we also found that customers would be willing to switch between Lloyds and Sainsbury’s pharmacies, particularly where the number of convenient competitor pharmacies was low.”
He added that if the bid went ahead LloydsPharmacy “will no longer face sufficient competition in 13 areas and [there is an expectation that] in these areas customers will lose out”.
The CMA has advised that LloydsPharmacy may have to sell stores in the 13 affected areas to alleviate competition conerns.
LloydsPharmacy currently operates around 1,540 pharmacies across the UK
Here’s a full list of the areas that the CMA have highlighted as causing a substantial lessening of competition for LloydsPharmacy shoppers:
- Reading & Theale
- Sandy, Potton & Biggleswade area
- Sutton Coldfield