The Competition and Markets Authority (CMA) is reviewing comments from interested parties on two remedies that GXO has proposed to ensure its acquisition of Wincanton does not reduce competition in grocery warehousing in the UK, writes Carol Millett
GXO’s preferred remedy is a 3PL sponsorship deal, which would fund new logistics providers and maintain contract terms for supermarkets. The second solution is to sell off part of Wincanton’s business to a competitor, ahead of the regulator’s final decision next month.
The 3PL plan would see GXO establish a sponsorship fund for each grocery retailer currently serviced by it or Wincanton, which would support the entry or expansion of new third-party logistics providers (3PLs) to ensure continued competition.
The remedy also includes contract term guarantees, which would allow grocery customers to maintain their existing contract terms if they choose, along with the preservation of the terms for current customers and their extension to new contracts.
The second proposed remedy is divestiture. This would see GXO selling off parts of Wincanton’s dedicated warehousing services for grocery customers to a suitable buyer approved by the CMA.
It would also include transferring certain customer contracts, necessary assets and key personnel with relevant expertise to the buyer, ensuring the continued provision of services.
This is the latest development in GXO’s battle to acquire Wincanton, which was halted in its tracks in November last year when the CMA raised concerns that the acquisition could reduce competition in dedicated warehousing services for UK grocery retailers.
