Sainsbury's-Asda will be more than prepared for CMA probe

  • Print
  • Share
  • Comment
  • Save

sainsbury-asda merger

Sir, It won’t come as a surprise to anyone that the CMA is officially launching an investigation into the proposed merger between Sainsbury’s and Asda.

Both retailers are looking to save time and energy by requesting that the investigation moves straight to Phase 2, a sensible recognition of the fact that this is inevitably what the CMA will do anyway.

The CMA will now look into the likely impact of the merger on the industry. Due to the potential for the newly merged entity to have significantly more buying power, suppliers to Sainsbury’s and Asda will certainly raise concerns that there will be too much market power concentrated in common control. For the merger to proceed, it will be important for the CMA to be persuaded (for the sake of suppliers) that the deal will not lead to undue buying power. Sainsbury’s and Asda will no doubt point to the many changes to the marketplace in recent years plus the advent and progress of the discounters in order to create more choice, for suppliers and customers alike.

Another key concern for the CMA will be that customers could be left with insufficient choice in some locations where the merging parties are the primary if not only options for day-to-day groceries. Sainsbury’s and Asda will surely already have identified the geographical locations in which the CMA may be most likely to consider there to be insufficient choice in the event of a merger and may consider volunteering the sale of some of these stores.

Jonathan Branton, head of EU and competition, DWF

Have your say

Sign up to a Free 30 day Gold Membership Trial

  • Claim your free trial >>
  • You will be able to:

    - Comment on your industry
    - Read the latest category information
    - Find out more on consumer behaviours to technological advances

    You must sign in to make a comment

    • Print
    • Share
    • Comment
    • Save

    Grocer jobs Experts in FMCG

    Essity Grocery Controller (Senior Sales Manager)

    Grocery Controller (Senior Sales Manager) - Essity

    excellent salary +car, bonus, PMI, pension
    Search jobs
    Sign in

    Newsletter Sign-up

    Free

    I wish to receive the following newsletters:

    For Members

    Become a Gold Member to receive these newsletters:

    Become a Platinum Member to receive these newsletters:

    Become a member of The Grocer

    Need more than 5 subscriptions? Make your life easier with a Corporate Account. Find out more.

    FOLLOW THE GROCER


    -

     
    Yes!I want to read more     CLAIM FREE TRIAL NOW
     
    Sign up to a 30 day free trial
    CLAIM FREE TRIAL NOW