The Competition and Markets Authority (CMA) has referred Sainsbury’s and Asda’s potential merger on for an “in depth” investigation.
Having completed Phase 1 of the investigation, the CMA confirmed that the deal “raises sufficient concerns” to be examined further with a more in-depth review.
If combined (and taking out divestments), Sainsbury’s and Asda’s merger would see the group overtake Tesco to become the UK’s largest food retailer with a 31 per cent share of the grocery market.
On Wednesday morning the CMA noted that Sainsbury’s and Asda are two of the largest grocery retailers in the UK, citing concerns that “shoppers could face higher prices or a worse quality of service,” with so many overlapping stores in hundreds of local areas.
Phase 2 will include a more in-depth review of the deal led by an in inquiry group chosen from the authority’s independent panel members.
CMA said the group would now gather evidence around the proposed merger via customer surveys and engagement with other retailers, suppliers and industry bodies to inform its detailed analysis.