Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Acquisition of Sainsbury’s pharmacy business by Celesio faces U.K. CMA investigation, (Dec 11, 2015)

By Michael Menzhuber, J.D., LL.M.

The anticipated acquisition of Sainsbury’s pharmacy business by Celesio AG will be referred for an in-depth investigation by an independent group of U.K. Competition and Markets Authority (CMA) panel members, the CMA announced today. Celesio, through its subsidiary Lloyds Pharmacy Limited, operates 1,542 pharmacies across the U.K. Sainsbury’s owns 277 pharmacy stores, generally within or next to existing Sainsbury’s supermarkets.

According to Sheldon Mills, CMA Senior Director of Mergers, a detailed investigation is needed. First, the majority of consumers in the U.K. need to use pharmacies at one time or another and they evidently provide an important service. Second, at a local level, pharmacies compete on a range of factors that are important to customers, such as availability of medicines, waiting and opening times, and the quality of advice. Third, after the merger, Lloyds will no longer face competition in certain local areas from one of its rivals and, following an initial investigation, there are concerns that this might affect choice, quality and service for customers.

The CMA’s initial investigation: (1) identified 78 local areas where customers may be affected by a loss of competition between Lloyds and Sainsbury’s pharmacies; and (2) indicated that in other local areas it has been unable to reach a positive conclusion on whether the merger gives rise to a realistic prospect of a substantial lessening of competition.

Companies: Celesio AG; J Sainsbury plc

News: Antitrust