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UK AC and Refrigeration Merger Sparks Concerns Over Choice

 |  November 26, 2023

The Competition and Markets Authority (CMA) has expressed preliminary concerns over the proposed merger between Wolseley UK Limited (Wolseley) and Kooltech Limited (Kooltech), two major players in the air conditioning and refrigeration industry. The potential merger, which would have significant implications for customers in Aberdeen, has prompted the CMA to scrutinize the deal in its Phase 1 investigation.

Both Wolseley and Kooltech, operating as UK-wide suppliers of air conditioning and refrigeration products, have established themselves with multiple branches across the country, including one each in Aberdeen. The city’s residents and businesses have come to rely on these branches, particularly for urgent demands and in-store pickups.

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The CMA’s provisional findings suggest that while the merged entity would still encounter competition in most locations across the UK, the scenario is starkly different in Aberdeen. Currently, Wolseley and Kooltech are the sole wholesalers of air conditioning and refrigeration products in the area. This unique market positioning raises concerns about the potential reduction in competition, which could lead to adverse effects on customer choice and pricing.

Customers in Aberdeen may face a dilemma of either accepting higher prices or settling for lower quality services should the merger proceed as planned. The scarcity of alternative suppliers in the region might result in reduced availability of stock, impacting the timely fulfillment of customer demands.

The CMA’s provisional findings underscore the importance of maintaining a competitive market to ensure that customers have a range of choices and access to affordable, high-quality services. The regulatory body will now proceed to the next phase of its investigation, seeking further evidence and input from stakeholders to make a comprehensive assessment of the potential impacts of the proposed merger.

Source: Gov UK