A PROPOSED £12billion merger between Sainsbury’s and Asda would mean both selling a ‘significant’ number of stores, said the competition watchdog which has ‘extensive’ concerns over the deal.
A tie-up between the two supermarket giants could increase prices, reduce quality in stores and online, and might lead to higher fuel costs in more than 100 areas where both have petrol stations, the Competition and Markets Authority (CMA) warned.
The watchdog said it would be ‘difficult for the companies to address the concerns it has identified’. It could force both chains to sell stores, end the Sainsbury’s or Asda brand — or block the deal.
Stuart McIntosh, who led the independent inquiry for the CMA said: ‘These are two of the biggest supermarkets in the UK, with millions of people purchasing their products and services every day.
‘We have provisionally found that, should the two merge, shoppers could face higher prices, reduced quality and choice, and a poorer shopping experience across the UK.’
Sainsbury’s and Asda said the provisional findings ‘misunderstand how people shop in the UK today’ and the CMA had rejected ‘the opportunity to put money directly into customers’ pockets, particularly at this time of economic uncertainty.’
The merger would create a brand bigger than Tesco with a revenue of £51billion and a network of 2,800 stores. Sainsbury’s said it would cut some prices by ten per cent. The CMA will give its final report by April 30.