CMA blocks proposed merger of Asda and Sainsbury’s
The Competitions and Markets Authority has blocked the proposed merger of the Asda and Sainsbury’s supermarket chains after finding that it would make UK shoppers worse off.
In its final report, the CMA said the merger would lead to price rises, reductions in the quality and range of products available, or a poorer overall shopping experience.
The investigation by a group of independent CMA panel members concluded that the deal would result in a reduction of competition at both a national and local level for people shopping in supermarkets, and not just in areas where Sainsbury’s and Asda stores overlap.
Stuart McIntosh, chair of the inquiry group, said: “It’s our responsibility to protect the millions of people who shop at Sainsbury’s and Asda every week.
“We have concluded that there is no effective way of addressing our concerns, other than to block the merger.”
The CMA said the investigation also found there would be fewer delivery options for customers shopping online. It also said that it would lead to motorists paying more at over 125 locations where Sainsbury’s and Asda petrol stations are situated close together.
In March Sainsbury’s and Asda vowed to introduce £1 billion worth of price cuts if the merger got the go-ahead.
Sainsbury’s also pledged to cap its fuel gross profit margin to no more than 3.5 pence per litre for five years while Asda said it would guarantee its existing fuel pricing strategy.
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