The OFT has decided that the test for reference is met in relation to the wholesale supply of books to independent book retailers in the United Kingdom. For this sizeable retail sector, this transaction is a '3 to 2' merger at the wholesale level - by removing Bertram as a separate competitor, it leaves independent retailers with a choice of either the merged Woolworths/Bertram or Gardner, each with a share of supply to this sector above 40 per cent.
The large body of retailer concerns raised directly with the OFT was supported by a survey carried out for the OFT through the Booksellers' Association - the first time the OFT has carried out such a customer survey in a merger case. Evidence from the parties' documents and from competitors also lent weight to the concerns.
The OFT also had insufficient evidence to suggest that new entry or expansion in wholesaling would be timely, likely or sufficient to compensate for the competition lost by the merger. As a result the OFT suspects that independent book retailers (and their customers) may suffer a reduction in choice of wholesaler and quality of service as a result of this merger'.