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CC provisionally clears Bertram deal

24.07.07 Philip Jones

The Competition Commission looks likely to allow Woolworth's to retain its ownership of book wholesaler Bertram after "provisionally clearing" the deal. The CC said that rival wholesaler Gardners and direct supply from publishers could both be used to prevent the combined Bertrams and THE exploiting their position in the market.

Inquiry chairman, Diana Guy, said: "We found that the ability of the merged company to exploit its position by lowering the available discounts or degrading their service levels will be limited. Gardners remains as a strong competitor in the wholesaling sector and there is scope for booksellers to divert at least some orders to direct supply."

She added that wholesalers were conscious of the financial viability of independent bookshops given the competitive pressures that the independents faced from other book retailers. "Publishers have a strong interest in supporting sales of their books and will be able to influence wholesalers and distributors in their relationships with retailers if they believe that those sales are at risk."

Woolworth's, which bought Bertram in February through it subsidiary EUK, said it was "pleased" that the transaction had been provisionally cleared. Woolies plans to merge EUK subsidiary THE with Bertrams. It has been running the units as two separate entities since the Office of Fair Trading announced its original investigation.

The CC also found that Woolworths' plans to develop the sale of books through its own stores would not influence its incentives to supply other retailers, and its involvement in the supply of books to libraries were so limited until now that no adverse effects could be expected from the merger.

The CC will now move on to the second part of its inquiry and has asked for interested parties to comment on the provisional findings, in writing, by 14th August 2007. To submit evidence, please email marjorie.davies@cc.gsi.gov.uk. The CC is expected to publish its final report in early September, and no later than the statutory deadline of 17th September 2007.

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Philip Jones EUK woolies Bertram

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