Asda and Sainsbury’s contest CMA concern at deal

SUPERMARKET giants Sainsbury’s and Asda have vowed to continue to press ahead with their merger plans despite the competition watchdog outlining a number of concerns it believes they would find “difficult” to address.

The rivals announced their intention to join forces last April, with the Competition and Markets Authority (CMA) launching a formal investigation into their proposals in August.

While that probe, which was initially expect to conclude in March, is due to run until the end of April, the CMA announced its preliminary findings yesterday, noting that the deal would likely lead to “higher prices, a poorer shopping experience, and reductions in the range and quality of products offered”.

It added that customers in the 463 areas where the two brands’ stores overlap would be hit hardest, with inflated fuel costs likely in the 100-plus locations where both operate a petrol station.

Asda, which is owned by US business Walmart, and Sainsbury’s, which is listed on the London Stock Exchange, issued a joint statement refuting the claims, saying that the CMA’S findings “fundamentally misunderstand how people shop in the UK today” while its analysis “is inconsistent with comparable cases”.

“Combining Sainsbury’s and Asda would create significant cost savings, which would allow us to lower prices,” they said.

“Despite the savings being independently reviewed by two separate industry specialists, the CMA has chosen to discount them as benefits.

“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.

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

Despite this, analyst Neil

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