CC 'provisionally' clears Woolies' Bertrams deal

<p>The Competition Commission looks likely to <a href="http://www.thebookseller.com/news/42528-cc-provisionally-clears-bertram-... the acquisition of book wholesaler Bertram by Woolies</a>, paving the way for the creation of a giant wholesaler, made up of THE's book business and Bertram, whose only real competition will be rival Gardners.</p>
<p><img width="122" height="115" align="left" src="/documents/UserContributed/bertramslogo.gif" alt="Bertram Books" /></p>
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<p>The CC was never likely to ask Woolies to unravel the completed acquisition--but it could have imposed some serious conditions on the merger. Instead it is relying on competition from Gardners to curb any threat from an enlarged Bertrams/THE. It also reckons publishers will play a hand in supplying independents in a situation where bookshops wish to look beyond the wholesalers.<br />
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You can read the CC's summary findings <a href="/documents/Blogs/summary_of_provisional_findings.pdf">here</a>.</p>
<p>The CC states: <em>&quot;We concluded that many of the&nbsp; retailers could feasibly switch a proportion of their demand to direct supply. This is likely to present a sufficient constraint at the margin to prevent a blanket increase in prices in the wholesale supply of books (and for the same reasons prevent a decrease in quality of service) across all retailers. Publishers would also have the&nbsp; option of promoting closer competition from their distributors if they believed&nbsp; wholesalers were operating in a way which adversely affected the publishers&rsquo;&nbsp; interests in selling books. We also expect that Gardners would seek to compete aggressively if THE/Bertram were to seek to increase prices.&quot; </em><br />
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And: <em>&quot;We found that a policy of discriminating against independent retailers was unlikely to&nbsp; be profitable because such retailers varied in the ability and willingness to increase their purchases from distributors, and there was no obvious means of determining the willingness of individual retailers to switch to direct supply.&quot;</em></p>
<p>However, not everyone has been happy with the deal, with some independent booksellers speaking out against a merger that will reduce their choice of wholesaler from three to two.</p>
<p>It remains to be seen whether the discontents can change the CC's mind in the three weeks it has given interested parties to comment on the provisional findings. It seems unlikely.</p>
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