Daily Mail

Sainsbury’s in ‘desperate’ bid to seal merger

- By Hannah Uttley

SAINSBuRY’S has been accused of ‘desperatio­n’ after it promised £1bn of price cuts in a scramble to get its £14bn merger with Asda approved.

The two supermarke­ts said they would spend £300m cutting prices in the first year of a tie-up and a further £700m over the following two years, leading to a 10pc reduction in the cost of everyday items.

Sainsbury’s, whose disappoint­ing sales have left it lagging behind rivals, also pledged to cap how much profit it makes selling petrol and diesel. It was the latest bid to convince the competitio­n watchdog to approve a deal creating the country’s largest supermarke­t.

Experts have declared the merger ‘dead in the water’ after the Competitio­n and Markets Authority (CMA) last month told the pair they could be forced to sell hundreds of stores or risk the deal being blocked. Sainsbury’s hit back, accusing the CMA of making ‘significan­t errors’ in its analysis of the deal. But one rival retailer said: ‘ Sainsbury’s statement smacks of desperatio­n. Their claims about price cuts still lack a lot of detail, like how many prices will be cut and on what products.’

In a joint statement, Sainsbury’s chief executive Mike Coupe ( pictured) and Asda boss Roger Burnley said: ‘We are trying to bring our businesses together so that we can help millions of customers make significan­t savings on their shopping and their fuel costs, two of their biggest regular outgoings.’

Sainsbury’s has even lobbied fuel campaigner­s to try to convince them that the merger would be in the best interests of British motorists.

In a letter to the Fair Fuel Campaign, Coupe and Burnley said the CMA’s suggestion that the merger could result in higher prices ‘could not be further from the truth’. Sainsbury’s has now committed to cap how much money it makes from fuel at 3.5p per litre if the deal goes through. Coupe and Burnley told Fair Fuel: ‘We hope you agree that the merger would be good news for motorists.’ The pair plan to save £1.6bn by squeezing suppliers, putting Sainsbury’s- owned Argos shops into Asda, and jointly buying goods and services. Coupe and Burnley said: ‘We hope that the CMA will properly take account of the evidence we have presented and correct its errors. We have proposed a reasonable yet conservati­ve remedy package.’ The CMA is this week expected to publish responses to its provisiona­l findings, with a final report due by April 30.

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