Sainsbury’s and Asda merger blocked over fears it will push up prices for drivers and shoppers
The Competition and Markets Authority warns that the £12billion merger would lead to increased prices in stores, online and at hundreds of petrol stations across the UK
A TIE-UP between Asda and Sainsbury's has been blocked at the final hurdle amid fears it will push up prices for shoppers.
The Competition and Markets Authority (CMA) warns that a merger would lead to increased prices in stores, online and at hundreds of petrol stations across the UK.
In its final report, published today, the CMA also found that the joining of the two supermarkets would result in reductions in the quality and range of products available and lead to fewer online delivery options, creating a poorer overall shopping experience.
This lack of competition would affect shoppers across the country, according to the CMA, not just those in areas where Sainsbury’s and Asda stores overlap.
Even competition from the likes of Aldi and Lidl and online disruptions, such as Amazon, wasn't considered enough to allow the merger to go ahead.
Stuart McIntosh, chair of the inquiry group, said: “It’s our responsibility to protect the millions of people who shop at Sainsbury’s and Asda every week.
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"Following our in-depth investigation, we have found this deal would lead to increased prices, reduced quality and choice of products, or a poorer shopping experience for all of their UK shoppers.
“We have concluded that there is no effective way of addressing our concerns, other than to block the merger.”
Both supermarkets can appeal the decision at a tribunal court but Asda and Sainsbury's have confirmed they have no plans to do so.
Judith McKenna, chief executive of Walmart International, which owns Asda, said: "The UK remains one of the most competitive retail markets in the world and Asda’s seven consecutive quarters of year-on-year growth show it is a strong business with a clear strategy and focused leadership.
"It was against that backdrop that we decided to explore the proposed merger with Sainsbury’s – an opportunity which would have further strengthened the Asda business and delivered real benefits for UK customers.
"While we’re disappointed by the CMA’s final report and conclusions, our focus now is continuing to position Asda as a strong UK retailer delivering for customers."
Sainsbury’s chief executive, Mike Coupe, added: "“The specific reason for wanting to merge was to lower prices for customers.
"The CMA’s conclusion that we would increase prices post-merger ignores the dynamic and highly competitive nature of the UK grocery market.
"The CMA is today effectively taking £1billion out of customers’ pockets.”
More on food
The merger between the two supermarkets was first referred to the CMA in September 2018 but over the past months the watchdog has raised concerns about the plans.
There were fears it could spark the sale of almost 500 supermarkets.
While it was also thought the merger could put 2,500 jobs at risk.
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