GXO’s purchase of Wincanton is likely to reduce competition in the supply of dedicated warehousing services to UK grocers, according to the Competition and Markets Authority (CMA).
In its initial assessment of the US firm’s £762m takeover of Wiltshire-based firm Wincanton last year, the CMA said that while some alternatives would remain for supermarkets, these would not be enough to prevent fees rising and that the deal could raise costs for grocers that rely on dedicated warehousing services as part of their logistics.
Richard Feasey, chair of the independent inquiry group, said: “Contract logistics services play a critical role in ensuring that supermarket shelves are fully stocked for customers in the UK every day of the year. Our initial view is that this merger could raise the costs of these services and reduce choice for supermarkets who rely on these services for moving goods across the country.
“We want to ensure competition in this market is working as well as it can to manage costs for supermarkets and grocers, and ensure products continue to reach supermarket shelves efficiently.”
The CMA has invited interested parties to respond to its provisional findings by 5pm on Wednesday 12 March 2025.
GXO said it disagreed with the initial findings.
A spokesperson commented: “The CMA has found no competition concerns with the vast majority of the Wincanton business. Its focus is limited to a very small group of large and sophisticated companies, which will represent less than 10% of Wincanton revenue.
“This assessment is disproportionate for a business whose total revenue in 2024 exceeded £1.4bn and does not accurately reflect the totality of evidence presented. These companies have substantial pricing power, demonstrated ability to do this work themselves and the choice of a wide range of logistics players that are more than capable of servicing their needs.”
They added that the merger was a “pro-growth combination that will deliver efficiencies for UK businesses, reduce the overall cost to serve UK consumers and help make the logistics sector more effective and resilient” and also said there was no cost impact to UK customers or consumers from the transaction being approved in full.
GXO also said it had a “long legacy of outstanding performance for customers in the UK” and believed the case for unconditional clearance was strong.
The business will present its response to the CMA at its upcoming hearing in March and continue to work towards full clearance of the transaction by the end of April.
