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Retail

Sainsbury’s, Asda Reject CMA’s ‘Extensive’ Concerns Over Planned Merger

Sainsbury’s and Asda have hit back at a Competition and Market Authority statement in which the watchdog stated it had ‘extensive competition concerns’ about the planned merger between the two UK retailers.

In a statement published this morning, the CMA said that it believed the merger could ‘lead to a substantial lessening of competition at both a national and local level’, and potentially see price increases at the two retailer’s fuel outlets.

'Reduced Choice'

“These are two of the biggest supermarkets in the UK, with millions of people purchasing their products and services every day,” said Stuart McIntosh, chair of the independent inquiry group carrying out the investigation.

“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.”

'Fundamentally Misunderstand'

In response, Sainsbury’s and Asda issued a joint statement in which they said that the CMA’s findings ‘fundamentally misunderstand how people shop in the UK today and the intensity of competition in the grocery market.

‘The CMA has moved the goalposts and its analysis is inconsistent with comparable cases.’

The retailers said that the merger of the two would lead to ‘significant cost savings’ and lower prices, something it said the CMA has chosen to ignore.

‘We are surprised that the CMA would choose to reject the opportunity to put money directly into customers’ pockets, particularly at this time of economic uncertainty,’ the retailers added.

‘We will be working to understand the rationale behind these findings and will continue to press our case in the coming weeks.’

© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

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