The Competition and Markets Authority (CMA) has found that the planned purchase of Tesco Opticians by Vision Express could lead to a worse deal for customers in 3 local areas.
The CMA has been carrying out an initial investigation (phase 1) into the merger of the companies, which are both retail optician chains with stores located throughout the UK.
As part of its initial investigation, the CMA has looked at more than 200 local areas where Vision Express and Tesco Opticians both have stores. The CMAhas identified 3 local areas where Vision Express would not face sufficient competition after the merger, which could lead to price increases or a worsening in the quality or choice of the products and services on offer in-store. These areas are Barrow-in-Furness in Cumbria; Helston in Cornwall; and Ryde on the Isle of Wight.
Adam Land, CMA Senior Director and decision maker in this case, said:
Opticians provide a vital service for millions of people in the UK and it is therefore important that any competition concerns are addressed. In this case, we have looked carefully where Vision Express and Tesco Opticians compete at present and identified 3 areas of the country where we believe this merger could result in a worse deal for eye care customers.
Vision Express now has the opportunity to offer undertakings to address the competition concerns identified by the CMA. If Vision Express does not offer undertakings, or if the undertakings offered do not sufficiently address the concerns that the CMA has identified, the merger will be referred for an in-depth phase 2 investigation.
All information relating to the merger is available on the case page.
- The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law.
- The Reference Test: under the Enterprise Act 2002 (the Act) the CMA has a duty to make a reference to phase 2 if the CMA believes that it is or may be the case that a relevant merger situation has been created, or arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a relevant merger situation; and the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.
- Under the Act a relevant merger situation is created if 2 or more enterprises have ceased to be distinct enterprises; and the value of the turnover in the United Kingdom of the enterprise being taken over exceeds £70 million (‘the turnover test’) or as a result of the transaction, in relation to the supply of goods or services of any description, a 25% share of supply in the United Kingdom (or a substantial part thereof) is created or enhanced (‘the share of supply test’).
- The CMA’s duty to refer the merger for a phase 2 investigation under the Act is not exercised whilst the CMA is considering whether to accept undertakings (if offered) in lieu of a reference. Vision Express has until 5 October 2017 to offer undertakings to the CMA that might be accepted by the CMA. If no undertakings are offered and accepted, then the CMA will refer the merger.
- All the CMA’s functions in phase 2 merger inquiries are performed by inquiry groups chosen from the CMA’s panel members. The appointed inquiry group are the decision-makers on phase 2 inquiries. The CMA’s panel members come from a variety of backgrounds, including economics, law, accountancy and/or business. The membership of an inquiry group usually reflects a mix of expertise and experience (including industry experience).
- The full text of this decision will be placed on the merger case page as soon as is reasonably practicable.