NPA seeks assurances for pork industry following Tesco/Booker deal

The National Pig Association (NPA) has called for assurances for the pork supply chain, following Tesco’s acquisition of Booker, the UK’s largest food wholesaler and owner of Londis and Budgens.

The NPA has expressed concerns that this further concentration of power within the supply chain could have a negative impact on pig producers.

NPA 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.
Announced on Friday 27 January, Tesco chief executive Dave Lewis said the retailer’s £3.7bn takeover of Booker would create the “UK’s leading food business” and that the move would “benefit consumers, small retailers, suppliers and shareholders”.

NPA vice-chairman Richard Longthorp pointed out that, historically, Budgens has been a good supporter of British pork, while Londis was an “Aldi/Lidl type operation”, although more focused at the convenience store end of the range. He added that Booker could be Tesco’s entry to foodservice,.

Longthorp also raised the question of whether the retailer might try to brand its acquisitions as Tesco.

However, in the latest AHDB Porkwatch survey, Tesco was reported to be one of worst supporters of British pigmeat, second only to Asda among the top 10 retailers in terms of the percentage of pigmeat it imports for its stores.

Explaining the merger further, Lewis said: “Tesco has made significant progress in turning around our UK retail business. This merger with Booker will further enhance Tesco’s growth prospects by creating the UK’s leading food business with combined expertise in retail, wholesale, supply chain and digital. Wherever food is prepared and eaten – ‘in home’ or ‘out of home’ – we will meet this opportunity with the widest choice and best service available.”

Charles Wilson, chief executive officer of Booker, said: “Booker is committed to improving choice, prices and service for the independent retailers, caterers and small businesses that we are proud to serve. We believe that joining forces with Tesco offers the potential to bring major benefits to end-consumers, our customers, suppliers, colleagues and shareholders.”

The deal is subject to approval by the Competition and Markets Authority.

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