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Sainsbury's-Asda merger blocked by the competition watchdog

Sainsbury's-Asda merger blocked by the competition watchdog

The competition watchdog has blocked Sainsbury's proposed merger with Asda on the grounds that it would result in "increased prices" and a "poorer shopping experience" for UK shoppers.

The Competition and Markets Authority (CMA) launched an in-depth investigation into the proposed merger between the two supermarket giants last year.

And it has now said that as well as prices increasing in store, the deal would lead to motorists paying more for fuel at over 125 locations where Asda and Sainsbury's petrol stations are located close together.

Sainsbury's, Asda and Walmart – which owns Asda – have now agreed to terminate the deal.

What does the CMA say?

Stuart McIntosh, chair of CMA's inquiry group, said: "It's our responsibility to protect the millions of people who shop at Sainsbury's and Asda every week. Following our in-depth investigation, we have found this deal would lead to increased prices, reduced quality and choice of products, or a poorer shopping experience for all of their UK shoppers.

"We have concluded that there is no effective way of addressing our concerns, other than to block the merger."

What do the supermarkets say?

Sainsbury's chief executive Mike Coupe said: "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. The CMA is today effectively taking £1 billion out of customers' pockets."

Roger Burnley, the Asda chief executive, said that he was "disappointed" in the CMA's decision.

Additional reporting by the Press Association.