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Asda-Sainsbury’s merger in doubt amid competition concerns

By John Glenday | Reporter

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February 20, 2019 | 3 min read

A putative merger between two of Britain’s big six supermarket giants has been thrown into doubt after the UK competition regulator declared that it had ‘extensive concerns’ about the tie-up.

Sainsbury’s had been due to takeover its erstwhile rival Asda but a detailed investigation by the Competition and Markets Authority (CMA) has raised fears that this could undermine competition in stores, online and on petrol forecourts.

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Asda-Sainsbury’s merger in doubt amid competition concerns

In response the CMA is calling for the proposed tie-up to be binned or, at the very least, some form of divestment arrangement where both sides sell off crucial assets to others – although it concedes this latter solution may be ‘ineffective’.

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CMA chair Stuart McIntosh 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.”

In a joint retort both Sainsbury’s and Asda rejected these claims out of hand, pledging that they would pass on any economies of scale direct to consumers.

A deadline of 13 March has been set for responses to the CMA’s findings with a final report following by 30 April.

Merger talks between the pair were first instigated in the spring of last year.

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