CMA finds Veolia-Suez merger could see waste bills rise
By Josh White
Date: Thursday 19 May 2022
(Sharecast News) - The competition regulator has found that the merger of Veolia and Suez would lead to a loss of competition in waste and water management services, it announced on Thursday.
It said the loss of competition could lead to more costly and lower quality services, and in turn to higher council tax bills, as local councils and some businesses would have less choice when procuring key waste and water management services.
The Competition and Markets Authority (CMA) said Veolia and Suez are two of the largest suppliers of waste management services to councils and businesses in the UK.
Both companies are active across the waste management supply chain, from collecting waste to operating facilities for composting and incineration, to landfill sites.
The companies also supply water and wastewater management services to industrial customers.
An inquiry into the deal was launched in October, before it was referred for an in-depth phase two investigation led by an independent inquiry group in December.
The CMA said its investigation was focussing on eight markets within the waste and water management sector in which the two companies currently compete.
It said it had taken into account that Veolia and Suez, which are the only suppliers in the UK active across the entire waste management chain, were two of a few companies able to serve the "largest and most complex" waste management contracts with councils.
The CMA said it provisionally found that the merger raised competition concerns in seven of those eight markets.
In each of the markets, the merging businesses currently competed "closely", and would face limited competition after the merger.
The regulator said it was concerned that it would result in higher cost or lower quality services for councils, with knock-on effects for taxpayers, as well as businesses across the UK.
"We all use waste and recycling services in some way, so it's vital that these markets are competitive and provide good value for money," said Stuart McIntosh, chair of the CMA inquiry group.
"This is all the more important at a time when local authority budgets are already stretched and waste management services have to evolve to help achieve net-zero targets.
"We've heard from a number of customers, including local authorities, who are concerned that this merger could reduce competition in markets where choice is already limited, leading to higher prices or poorer services."
McIntosh said the inquiry group shared the concerns, and wanted to ensure commercial customers and councils did not end up with a worse deal, leaving taxpayers to foot the bill at a time when household budgets were already under massive pressure.
The CMA said it was taking responses from interested parties before issuing a final report by 17 July.
Reporting by Josh White at Sharecast.com.
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