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CMA blocks Sainsbury’s and Asda merger

Published:  25 April, 2019

The proposed merger between Sainsbury’s and Asda has been blocked by the Competition and Markets Authority (CMA).

In a statement released this morning, the CMA said it had made the decision to block the merger after finding it would lead to increased prices in store, online and at petrol stations across the UK.

Consumers would ultimately be “worse off” if Sainsbury’s and Asda - two of the country’s biggest supermarkets, were to merge, it stated.

In its final report, published today, the Competition and Markets Authority (CMA) found that UK shoppers and motorists would be worse off if Sainsbury’s and Asda – two of the country’s largest supermarkets – were to merge.

This, it said, is due to expected price rises, reductions in the quality and range of products available, or a poorer overall shopping experience.

“Following an in-depth investigation, a group of independent CMA panel members concluded that the deal would result in a substantial lessening of competition at both a national and local level for people shopping in supermarkets. This would mean shoppers right across the UK would be affected, not just in the areas where Sainsbury’s and Asda stores overlap,” said Stuart McIntosh, chair of the inquiry group.

In response to the decision, Sainsbury’s chief executive, Mike Coupe, said the CMA “is today effectively taking £1 billion out of customers’ pockets”.

But he said the supermarkets would not appeal against the decision.

“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.”

This final decision to block the deal follows the publication of the CMA’s provisional findings and a subsequent consultation period, during which the CMA reviewed responses from a variety of interested parties, including Sainsbury’s and Asda themselves.