CMA blocks Sainsbury’s-Asda merger

The Competition and Markets Authority (CMA) has formally blocked the proposed merger of Sainsbury’s and Asda.

The Competition regulator concluded that shoppers would be worse off if the deal went ahead due to an expected increase in prices and a reduction in product choice, resulting in a poorer shopping experience.

The two supermarket giants had previously said the merger would create better buying power which would lead to better deals for its customers, but the CMA has had concerns throughout the entire process.

The two supermarkets have decided to end the deal and not appeal the decision.

Sainsbury’s CEO, 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.”

Catherine Shuttleworth, founder and CEO of Savvy, commented: “The comments from Stuart McIntosh of the CMA this morning – that it would be difficult to track prices post the proposed merger – is completely unbelievable. It has never been easier to track supermarket prices. Additionally Sainsbury had committed to a transparent audit of pricing by a third-party post any merger. The more we hear from the CMA the more we should be concerned that they are not working in the best interests of consumers and clearly do not understand the market dynamics of the UK grocery sector.”