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Suppliers Fearful Over Sainsbury's-Asda Merger, Submissions Find

Published on Nov 14 2018 10:29 AM in Retail tagged: Featured Post / Sainsburys / UK / CMA / Asda / Paywall / Competition & Markets Authority

Suppliers Fearful Over Sainsbury's-Asda Merger, Submissions Find

An unidentified major supplier to the UK supermarket sector has said that the planned merger between Sainsbury's and Asda would likely 'harm consumers' and open the door for actions that would be detrimental to suppliers, a submission to the Competition and Markets Authority (CMA) has said.

The submission to the CMA, by a supplier known only as 'Supplier B', said that the planned merger will lead to a 'further swing in bargaining power in favour' of Sainsbury's/Asda.

This, in turn, could lead to the parties 'pushing for unrealistic price cuts and disproportionate investment from suppliers', as well as 'refusing to list new products' or 'positioning private label products to the detriment of branded products'.

In addition, the supplier fears that the merger has the potential to create a duopoly between Tesco and the combined entity, which could 'facilitate collusion [...] ultimately harming consumers'.

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