The UK’s competition regulator has launched a warning, saying the merger between waste management rivals Veolia and Suez would lead to a loss of competition in waste and water management services, a sector considered vital for public health.
The Competition and Markets Authority (CMA)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.
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 would be focussing on eight distinct markets within the waste and water management sector in which the two companies currently compete across the country.
Previous criticism of the deal from the UK regulator came during the investigation phase, with then-Chief Executive Andrea Coscelli commenting that “Councils spend hundreds of millions of pounds on waste-management services. Any loss of competition in this market could lead to higher prices for local authorities, leaving taxpayers to foot the bill.”
The companies have also faced resistance to the deal from the EU Commission, which has raised similar concerns over the potential loss of competition. The companies have tried to placate the EU’s regulator, offering to spin off Suez’s French water activities and some international assets – including in Italy, the Czech Republic, India and Australia – into a new entity called New Suez to address competition concerns.
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