Sainsbury’s-Asda merger in jeopardy

Sainsbury's shopper Image copyright Newscast

The UK’s competition watchdog has said the proposed tie-up between Sainsbury’s and Asda could push up prices and cut choice for customers.

The Competition and Markets Authority (CMA) said it was “likely to be difficult” for the chains to “address the concerns”.

The CMA also said the merger could lead to a “poorer shopping experience”.

Sainsbury’s boss told the BBC the findings were “outrageous” and he would continue to challenge them.

Chief executive Mike Coupe described the CMA’s analysis as “fundamentally flawed” and said the firm would be making “very strong representations” to it about its “inaccuracy and lack of objectivity”.

“They have fundamentally moved the goalposts, changed the shape of the ball and chosen a different playing field,” he told the BBC.

“This is totally outrageous.”

These are the CMA’s provisional findings and the firms will have a chance to respond.

‘Lower prices’

The deal would create a business accounting for £1 in every £3 spent on groceries, with a 31.4% market share and with 2,800 stores.

Stuart McIntosh, chair of the CMA’s independent inquiry group, said: “We have provisionally found that, should the two merge, shoppers could face higher prices, reduced quality and choice, and a poorer overall shopping experience across the UK.

“We also have concerns that prices could rise at a large number of their petrol stations.”

However, in a joint statement, Sainsbury’s and Asda said combining the two chains would create “significant cost savings, which would allow us to lower prices”.

“Despite the savings being independently reviewed by two separate industry specialists, the CMA has chosen to discount them as benefits.”

The CMA will reach its final decision on 30 April.

CONTACT US

We're not around right now. But you can send us an email and we'll get back to you, asap.

Sending

Log in with your credentials

Forgot your details?