The Competition and Markets Authority’s (CMA) Independent Inquiry Group examined the impact of the merger on the contract logistics sector and found that GXO and Wincanton are two of the three main providers of dedicated warehousing services to UK grocers, alongside DHL. The CMA found that while some supermarket customers could turn to DHL or switch to in-house warehousing, these alternatives may not be sufficient to maintain competition in the sector.
“Contract logistics services play a critical role in ensuring that supermarket shelves are fully stocked for customers in the UK every day of the year. Our initial view is that this merger could raise the costs of these services and reduce choice for supermarkets who rely on these services for moving goods across the country,” stated Richard Feasey, Chair of the independent inquiry group.
The CMA has invited interested parties to submit responses to these provisional findings by 12 March 2025, with a final decision expected by the end of April.
GXO rejects CMA’s concerns
GXO strongly disagreed with the CMA’s concerns, arguing that the focus on grocery warehousing affects only a small segment of Wincanton’s business. In its official statement, GXO called the CMA’s assessment “disproportionate”, highlighting that the affected segment represents less than 10% of Wincanton’s total revenue, which stood at over £1.4 billion in 2024.
“The CMA has found no competition concerns with the vast majority of the Wincanton business. Its focus is limited to a very small group of large and sophisticated companies, which will represent less than 10% of Wincanton revenue. This assessment is disproportionate for a business whose total revenue in 2024 exceeded £1.4bn and does not accurately reflect the totality of evidence presented,” GXO stated.
The company maintained that supermarkets have strong pricing power, alternative logistics providers, and in-house capabilities to mitigate any competition concerns. GXO is pushing for unconditional clearance and plans to present its formal response to the CMA in March, with the aim of securing full approval by the end of April.
A year-long scrutiny of the acquisition
GXO first announced its intent to acquire Wincanton in February 2024, positioning the deal as a strategic expansion to strengthen its UK logistics operations. The acquisition was completed on 29 April 2024, but the CMA imposed an Interim Enforcement Order (IEO) preventing GXO and Wincanton from integrating their businesses while the regulator carried out a full review.
The CMA’s inquiry has since focused on assessing whether the merger could substantially lessen competition in contract logistics services, particularly in warehousing for grocery retailers. While the interim report did not identify significant concerns in other areas such as transport services and shared warehousing, the grocery warehousing market remains a sticking point in the regulator’s review.
What happens next?
- 12 March 2025 – Deadline for interested parties to submit feedback to the CMA.
- April 2025 – Final CMA decision expected.
- GXO aims for full regulatory clearance by the end of April.