CMA blocks Sainsbury’s-Asda merger

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The Competition and Markets Authority has blocked the proposed merger between Sainsbury’s and Asda saying it would increase prices and reduce the quality and range of products available.

Stuart McIntosh, chair of the inquiry group, said: “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.”

The two retailers unveiled the merger plan in April last year saying it would save at least £500 million. In March this year, the two promised £1 billion savings for consumers in response to unfavourable provisional findings from the CMA.

Responding to the CMA decision to block the merger, Sainsbury’s chief executive Mike Coupe said: ” 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.”

Judith McKenna, chief executive of Walmart International, said: “While we’re disappointed by the CMA’s final report and conclusions, our focus now is continuing to position Asda as a strong UK retailer delivering for customers. Walmart will ensure Asda has the resources it needs to achieve that.”


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