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Pharmacy merger faces in-depth investigation in UK

Staff writer |
Celesio’s anticipated acquisition of Sainsbury’s pharmacy business faces being referred for an in-depth investigation by the CMA.

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Celesio AG (Celesio), through its subsidiary Lloyds Pharmacy Limited, operates 1,542 pharmacies across the UK, whilst Sainsbury’s owns 277 pharmacy stores, generally within or next to existing Sainsbury’s supermarkets.

Although the price of prescription medicines is regulated, pharmacies largely compete on a range of quality and service factors - such as opening and waiting times, quality of advice, availability of medicines and additional services.

The Competition and Markets Authority’s (CMA) initial investigation has identified 78 local areas where customers may be affected by a loss of competition between Lloyds and Sainsbury’s pharmacies.

It has also 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.

The merger will therefore be referred for an in-depth phase 2 investigation by an independent group of CMA panel members.

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