Thursday 27 October 2016

UK watchdog investigates Sainsbury's pharmacy sale

Ashley Armstrong

Published 31/12/2015 | 02:30

Lloyds Pharmacy
Lloyds Pharmacy

The UK's competition watchdog has launched an in-depth investigation into Sainsbury's sale of its pharmacies to the owner of Lloyds Pharmacy.

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The Competition and Markets Authority (CMA) said Celesio, which owns Lloyds, had failed to alleviate concerns that the deal might affect consumer choice.

At the start of the month, the CMA said an initial investigation had found that the sale of 277 stores to Celesio might affect customers in 78 local areas and it had not been able to reach a "positive conclusion on whether the merger gives rise to a realistic prospect of a substantial lessening of competition". The phase two investigation by the CMA could mean a significant delay to the deal closing, after Sainsbury's initially had hoped to complete it by February.

The £125m (€169m) deal was originally announced in July.

"We continue to work closely with Lloyds Pharmacy during their discussions with the CMA. Both parties remain fully committed to the transaction and we continue to work towards a completion date of 29 February," a Sainsbury's spokesman said.

Celesio, which is owned by US drugs wholesaler McKesson, operates 1,542 pharmacies across the UK, making it the largest pharmacy chain after Alliance Boots.

Lloyds also competes with Superdrug, which has pharmacies in roughly one in four of its 800 stores and Rowlands, which owns more than 500 chemists.

Lloyds missed out last year on the chance to snap up the Co-op's 700 pharmacies after it lost out to Bestway, which bought the stores for £620m.

Sainsbury's sale of its instore pharmacies is part of chief executive Mike Coupe's plan to re-evaluate how the supermarket used its shop floor space amid intensifying competition. (© Daily Telegraph, London)

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