EXCLUSIVE

The government’s competition watchdog is likely to ask Lloydspharmacy to give up some of its newly acquired Sainsbury’s stores, a competition expert has told C+D.

Competition consultant Vivienne Robinson said she would be “surprised” if the Competition and Market Authority’s (CMA’s) investigation into the sale of the supermarket’s 281 pharmacies did not result in Lloydspharmacy relinquishing some branches to Sainsbury’s or a new owner.

Ms Robinson said the watchdog will only authorise the merger, announced in July and due to be completed by February 2016, if it is sure it will not reduce consumers’ choice in any part of the country.

Last week, the CMA announced it was considering whether the deal will result in a “substantial lessening of competition within any UK market”.

The deal will increase the network of Lloydspharmacies to around 1,800 – 13% of the total number of community pharmacies in the UK.

Although this is not enough to cause concern about reducing consumer choice at a national level, the CMA “definitely won’t like it” if the merger results in pharmacies in any given area being owned by as few as two parent companies, Ms Robinson told C+D yesterday (September 15).

"Long and expensive" investigation

If Lloydspharmacy wants to avoid a “long and expensive” investigation then it is “at the mercy of the CMA” to agree to any conditions the watchdog sets out, Ms Robinson said.

The CMA has invited the public to submit evidence of any potential competition issues by September 23, and Ms Robinson said it will be “very interested in third-party comments”. “If there are no complaints about the merger, it’s likely to sail through,” she added.

The CMA expects to make an initial decision by November 11, and Celesio told C+D it will not comment on the inquiry “while proceedings are ongoing”.

Will the Sainsbury's pharmacy takeover reduce patient choice?

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