CMA launches investigation into Sainsbury's-Asda merger

The Competition and Markets Authority (CMA) has formally launched the first phase of its investigation into the proposed merger between Sainsbury’s and Asda.

The CMA will look at whether the deal between the two supermarkets will mean less consumer choice, higher prices or worse service for consumers. It will also look at whether the merged company could negatively affect prices for suppliers.

The proposed group would operate around 2,800 stores and include the Argos, Habitat and George brands.

Commenting on the launch of the inquiry, CMA chief executive Andrea Coscelli said: “About £190bn is spent each year on food and groceries in the UK so it’s vital to find out if the millions of people who shop in supermarkets could lose out as a result of this deal.

“We will carry out a thorough investigation to find out if this merger could lead to higher prices or a worse quality of service for shoppers and will not allow it to go ahead unless any concerns we find are fully dealt with.”

Over the past few months, the CMA has been gathering information needed to start Phase 1 of the inquiry. The authority is now inviting the general public to submit their views on how the merger could affect competition before August 31.

Sainsbury’s and Asda have both requested that the CMA fast-track its Phase 1 investigation so the authority can move on to a more in-depth Phase 2 investigation.

One of the UK’s largest trade unions GMB has welcomed the CMA investigation into the proposed Sainsbury’s-Asda merger.

GMB national officer Gary Carter said: “It is only right a deal this size - with all the implications for consumer choice, jobs and the high street - is subject to proper and very detailed scrutiny. Between them, Asda and Sainsbury’s employee 330,000 people in the UK with combined profits of more than £1.4bn.

“The ramifications of the proposed merger not only affect choice, but the economic and social well-being of families and their communities. Asda and Sainsbury’s say they intend to keep the current brands, run the supermarkets separately and that there will be no store closures. We hope the CMA will put this to the test.”