Peak farmers’ union warns on Sainsbury’s-Asda merger

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Farmers Sainsbury's-Asda

The UK’s peak farmers’ union has warned that the proposed Sainsbury’s-Asda merger could lead to a further price squeeze for farmers, should competition authorities give it the green light.

The National Farmers’ Union (NFU) also warned that the deal, worth £12 billion, could reduce the choice and innovation of products available for shoppers.

The arguments were raised in oral evidence to the CMA, according to Reuters.

NFU head of food and farming Philip Hambling said farmers feared how Sainsbury’s-Asda could deliver its proposed 10 per cent saving for shoppers without passing the pressure on to farmers.

“At a time when farms are already facing intense price pressure, the prospect of a further squeeze on price leaves farmers concerned about the potential impacts on their businesses,” Hambling said.

He added: “Continually squeezing margins can take away the ability of the food and farming industry to invest and improve quality, range and sustainability.

The NFU’s concerns come a week after an unidentified major grocery supplier told the CMA in a submission that the proposed merger would be “extremely detrimental” to shoppers.

Big 4 rival Morrisons also expressed concerns over the proposed merger’s impact on national and local grocery competition, while Waitrose highlighted concerns over the creation of a duopoly.

Sainsbury’s and Asda’s key argument was that the deal would lower prices and improve customer offerings, while allowing suppliers to grow their businesses.

The two grocers also believe the CMA would not insist on a level of store disposals that would make the deal unpalatable.

The CMA is continuing to carry out its probe on the proposed Sainsbury’s-Asda merger, part of which it will seek views from interested parties.

It will publish submissions as it receives them.

The competition regulator is slated to reveal provisional findings on the proposal early next year.

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4 COMMENTS

  1. It will be the worse thing to happen for the farmers and the shoppers because we will have so many empty stores and the tie up still will not be able to match aldi or lidi on price most of there good come from aboard

    • How many empty stores will there be when ASDA goes under? Bev, the same goods Aldi and Lidl get from *abroad are also imported by other retailers.

  2. This tie-up will be a disaster for everyone except for current management who will get big bonuses/redundancy pay offs and share holders. It really will be like Morrisons/Safeway but three times as big, the change over of systems and contracts will be a huge headache. The promises (as we all know) of 10% off “everyday items” will NOT happen and as for saying they will keep both companies as stand alone companies… who are they kidding? Within three years they will be “streamlining” with the closure of a head office and more stores.

  3. Sainsbury”s is much better quality than Asda, especially the food, I don’t eat any food from Asda , it tastes awful. Sainsbury”s would really be lowering themselves if they merged with Asda and many people I know including myself would never shop there again.

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