Rival supermarkets have warned that the Sainsbury’s–Asda merger could lead to a price hike and “impact outcomes for consumers”.
According to documents published by the CMA, which is currently carrying out its probe into the proposed merger, both Lidl and Waitrose have raised concerns about the probability of rising prices for consumers.
Lidl told the competition authority that the newly-formed entity would “have the capacity to increase prices” on products that do not compete directly on price with the discounters.
Meanwhile, Waitrose warned that the deal could “lead to a homogenous market, in which customers will be offered a reduced range and, ultimately, an increase in prices”.
It added that the increased buying power of the new group, which is predicted to have revenues of £51 billion a year, would effect competition and impact both consumers and suppliers.
As part of its probe, the CMA will seek views from interested parties like rival supermarkets and suppliers and publish submissions as it receives them.
When it was first announced at the end of April, Sainsbury’s boss Mike Coupe said the merger would lead to £500 million in cost savings and further investment to lower prices by around 10 per cent on everyday items.
Last week, it was revealed that the National Farmers Union raised similar concerns about the merger, warning that the £12 billion deal could reduce the choice and innovation of products while increase the squeeze on farmers.