Competition watchdog starts scrutiny of Sainsbury's-Asda merger

Rebecca Smith
Sainsbury's tie-up with Asda will be scrutinised by the competition watchdog in the UK
Sainsbury's tie-up with Asda will be scrutinised by the competition watchdog in the UK (Source: Getty)

The Competition and Markets Authority (CMA) said today it was kicking off its scrutiny of the proposed merger between supermarket giants Sainsbury's and Asda.

Sainsbury's announced at the end of last month that it intended to merge with Asda, which is currently owned by Walmart in the US. The two have said a deal will mean grocery prices across both chains will fall, and that a merger would not lead to store closures and job losses.

The competition watchdog said this morning it will be considering whether it is, or may be the case that the proposed merger will harm competition within any market for goods or services. It is gathering information ahead of a formal investigation getting underway.

Read more: Sainsbury's growth falls behind big rivals as Tesco's march continues

In its update, the CMA said it was "keen to ensure that all interested parties have the opportunity to make their views known and present all relevant evidence to the CMA".

It is issuing a preliminary invitation to comment, asking all interested parties to submit to the watchdog any initial views on the impact that the proposed tie-up could have on competition in the UK. The deadline for comments is 5pm on Monday 4 June.

The watchdog will also likely contact businesses and organisations active in the markets affected by the proposed merger, or "have valuable insights" that could help with the investigation, such as suppliers, competitors, and industry bodies.

Chairs of two select committees had said earlier this month they would be writing to the CMA asking the authority to take evidence from suppliers.

"This merger threatens customer choice, hands yet more power to mighty supermarket players and heaps more pressure on small and medium suppliers," said Rachel Reeves, chair of the Business, Energy and Industrial Strategy Committee.

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