Air conditioning and refrigeration merger could cut choice for Aberdeen customers
The CMA finds the proposed merger between two major air conditioning and refrigeration wholesalers could mean less competition and choice for customers in Aberdeen.
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Following a Phase 1 investigation, the Competition and Markets Authority (CMA) has provisionally found that the deal between Wolseley UK Limited (Wolseley) and Kooltech Limited (Kooltech) raises competition concerns in Aberdeen – potentially leaving customers to face higher prices or lower quality services.
Wolseley and Kooltech are both UK-wide suppliers of air conditioning (AC) and refrigeration products. Both businesses have multiple branches, including one each in Aberdeen, which are particularly important for customers with urgent demands or who prefer collecting in-store.
The merged business will continue to face sufficient competition from rivals in most locations. But the two companies are currently the only wholesalers of AC and refrigeration products in Aberdeen, so would face very limited competition after the merger. This could lead to higher prices and lower quality services, such as reduced availability of stock, for customers in that area.
Colin Raftery, CMA Senior Director of Mergers, said:
“Whilst the vast majority of businesses and other customers across the UK won’t lose out, we’re concerned that this deal could lead to higher prices and worse services for customers in the Aberdeen area.
“Our investigation found that it’s important for customers to be able to access air conditioning or refrigeration products locally when they need to – so a merger between the only two suppliers in this area would be a significant loss of competition for customers.”
Wolseley and Kooltech now have five working days to offer proposals to the CMA to address the competition concerns identified. The CMA would then have a further five working days to consider whether to accept these proposals in principle instead of referring the case for a Phase 2 investigation.
Further details are available on the Wolseley/ Kooltech case page.
Notes to editors:
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Wolseley (a wholly owned subsidiary of Wolseley Group Limited and ultimately owned by Clayton, Dubilier and Rice LLC) is a wholesaler which operates several distinct trading brands, such as Wolseley Climate and Wolseley Pipe, and sells plumbing, heating, cooling, and infrastructure products in the UK. Wolseley has around 500 branches across the UK in total but sells air conditioning (AC) and refrigeration products through approximately 50 branches – including one in Aberdeen. Kooltech is also a wholesaler of AC and refrigeration products with eight branches in the UK - including one in Aberdeen.
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The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. For CMA updates, follow us on Twitter, Facebook, and LinkedIn.
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All media enquiries should be directed to the CMA press office by email on press@cma.gov.uk or by phone on 020 3738 6460.