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Wednesday 26 February 2020

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CMA investigates Sainsbury’s/Asda merger

Written by Peter Walker
24/08/18

The Competition and Markets Authority (CMA) has launched its formal investigation into the proposed merger between J Sainsbury and Asda Group.

Since the announcement of the merger on 30 April, the CMA has been gathering the information needed to start its formal investigation. It will now begin the first phase of its detailed assessment into how the deal could affect competition for UK shoppers.

It investigation will consider whether the deal could lead to less choice, and therefore higher prices or worse quality services, across the range of products sold by both businesses. As well as being major retailers of groceries, both in-store and online, Sainsbury’s and Asda also compete to sell goods such as fuel, electricals, toys and clothing.

The CMA will also look at whether the merged company could use its increased buyer power to squeeze suppliers and whether this could have potential knock-on effects for shoppers – for example, through suppliers being less able to innovate or having to charge higher prices to stores that compete with the merged company.

Andrea Coscelli, chief executive of the CMA, said: “We will carry out a thorough investigation to find out if this merger could lead to higher prices or a worse quality of service for shoppers and will not allow it to go ahead unless any concerns we find are fully dealt with.”

Sainsbury’s and Asda have asked the CMA to move more quickly to the in-depth phase of the inquiry through a ‘fast-track’ process. It expects to accept this request unless there are any valid objections to the use of the fast-track process.

The CMA is now inviting views by 31 August on how the merger could affect competition.



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