CMA outlines Phase 2 enquiry for Sainsbury’s and Asda merger

18 October 2018 (Last Updated October 18th, 2018 11:07)

The UK Competition and Markets Authority (CMA) has identified the key areas of the recently announced Phase 2 investigation into the proposed Sainsbury’s and Asda merger.

CMA outlines Phase 2 enquiry for Sainsbury’s and Asda merger
Two spokespersons from Asda and Sainsbury’s. Credit: ASDA 2018.

The UK Competition and Markets Authority (CMA) has identified the key areas of a recently announced Phase 2 investigation into the proposed Sainsbury’s and Asda merger.

According to the CMA’s released statement, the agency will assess whether the merger could cause a rise in prices or reductions in the range or quality of products such as groceries bought both in-store and online, fuel, toys, small electricals and children’s clothing at both a local and national level.

The CMA will also investigate whether the merged company could use its increased buying power to put pressure on suppliers, which could also affect shoppers.

The CMA’s independent inquiry group chair Stuart McIntosh said: “Today, we are setting out a number of areas that we expect to look at as part of our investigation.

“It will be scrutinising extensive internal information from Sainsbury’s and Asda, and seeking the views of rival retailers and suppliers.”

“We welcome views on the effects of the merger and will carefully consider any evidence that we receive.

“The CMA expects to gather a wide range of evidence to explore these issues, which will include surveying Asda and Sainsbury’s shoppers, both in-store, online and the drivers who use the company’s petrol stations.

“It will also be scrutinising extensive internal information from Sainsbury’s and Asda, and seeking the views of rival retailers and suppliers.”

The CMA will issue its provisional findings early next year before the statutory deadline for its final decision on the 5 March 2019.

In a joint statement, an Asda spokesperson said: “We recognise that this is an important merger and welcome the detailed and thorough review by the CMA.

“We look forward to working constructively with the CMA and the inquiry panel during this second phase of the process and to making our case that the proposed merger is pro-competitive.

“Customers will be the big winners from the combination. By bringing our two businesses together, we will be able to invest further in more convenient ways of shopping while lowering prices and reducing the cost of living for millions of UK households.”