Watchdog says Rentokil-Cannon merger could cause a substantial lessening of competition
Watchdog says Rentokil-Cannon merger could cause a substantial lessening of competition

Bathroom services merger could limit customer choice

22 October 2018

A proposed merger between two of the UK’s biggest suppliers of bathroom services could lead to less choice for some customers, according to the Competition and Markets Authority (CMA).

The regulator has raised concerns that a proposed merger between companies Rentokil Initial and Cannon Hygiene could cause “a substantial lessening of competition” for buyers that require a single provider across the whole or a large part of the country.

The CMA said other suppliers of washrooms services did not compete strongly for the same customers and had seen no evidence that this would change after the merger.

“The merger would therefore leave a limited number of options for these customers,” it said.

Rentokil and Cannon are the second and third-largest suppliers of services including the supply and fitting of dispensers such as air sanitisers and soap dispensers, replacement of toilet paper and waste collection.

The biggest supplier, PHS, told the regulator in August that the move could affect prices, according to a CMA document.

The CMA has not identified concerns in relation to other services provided by the companies, including pest control, where it considers there is sufficient competition.

It is inviting comments on its provisional findings until 8 November 2018.

In August, the CMA announced it would look into whether the proposed merger between retailers Sainsbury’s and Asda would produce a company able to use its buying power to “squeeze suppliers”. The regulator said it would consider whether the deal, announced in April, would lead to less choice, higher prices or worse quality services.

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