GERMAN ASSAULT

Aldi and Lidl to face scrutiny over sales and tax as part of Sainsbury’s-Asda merger

LIDL and Aldi could be forced to reveal details of the inner workings of their growing empires as part of the investigation into sainsbury’s merger with Asda.

Pressure is mounting on the German discounters to reveal precise details of sales at individual stores, company structures and the amount of tax paid in UK as they continue to eat into the market share of the Big Four supermarkets.

The growth of the budget supermarket chains, which account for more than one in eight sales, were one of the key motivators for sainsbury’s bid to take over Asda.

Now it has emerged that the German firms could be forced to divulge financial information never revealed before when the competition watchdog probes the £ 14.1bn tie- up between sainsbury’s and Asda.

Aldi and Lidl have seen huge growth during the past decade and their discount model has been responsible for driving down prices at giants such as Tesco – which previously had been able to use its market share to dictate terms.

Over the past five years, the Big Four – Tesco, sainsbury’s Asda and Morrisons – have seen their market share slashed from 76.3pc to 70pc. About two in every three households shopped with at least one of the German discount chains in the 12 weeks to March, according to the latest data.

Last year Lidl revealed a £1.5bn expansion plan which will see it open 60 shops a year, while Aldi wants to open stores in every town and city in the UK.

For Asda and sainsbury’s to get the green light to merge from the Competition and Markets Authority (CMA), they may be forced to close or sell stores in areas where it could hurt competition, potentially pushing up prices for customers. The number of stores they will have to give up depends on whether the CMA considers Lidl and Aldi as competitors or only factor in Big Four rivals Tesco and Morrisons.

If Lidl and Aldi are deemed to be competitors, the CMA could use its powers to demand more financial details.

Lidl has never revealed how much tax it pays in the UK. Aldi is generally considered to be the more transparent of the two and paid £49.3m in tax on profits of £ 214.7m in 2016 – its latest accounts available.

It is understood both Aldi and Lidl are willing to co-operate with the CMA.

Neither Lidl, Aldi, sainsbury’s nor Asda wanted to comment.