Merger raises competition concerns over supply of commercial vehicle and trailer parts

Competition and Markets Authority questions purchase of 3G Truck & Trailer Parts by TVS Europe Distribution

Merger raises competition concerns over supply of commercial vehicle and trailer parts
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The Competition and Markets Authority (CMA) has raised concerns over the merging of 3G Truck & Trailer Parts Ltd and TVS Europe Distribution Limited, which the CMA says compete closely with each other to supply replacement parts for commercial vehicles and trailers to UK motor factors.

Customers seeking to purchase a wide range of parts from a single supplier would have limited alternatives after the merger, according the CMA which warns higher costs and lower quality services may result.

Kirstin Baker, inquiry group chair, said: “Both of these companies supply commercial vehicle and trailer parts that are vital to a wide range of businesses across the UK.

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“We are concerned that, as a result of this merger, distributors would be likely to face less product choice, poorer service and higher prices.

“This could make it more difficult and expensive for garages and repairers to service their customers’ vehicles and keep them on the road.”

In reaching this provisional decision, the CMA analysed a significant body of evidence looking at how closely the two businesses compete, including the companies’ internal documents and feedback from customers and competitors.

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The companies’ internal documents showed that the businesses monitor each other closely when determining their strategies and setting prices, and that Universal Components’ decision to buy 3G was motivated in part by the desire to remove one of its main competitors from the market.

All interested parties now have until 4 November 2020 to submit views on possible remedies to address the CMA’s concerns and until 11 November 2020 to submit views on the CMA’s provisional findings.

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