Morrisons has become the latest grocer to warn the CMA that the proposed merger between Asda and Sainsbury’s would severely impact competition.
The retailer told the peak competition authority, which is currently investigating the potential impact of the landmark merger, that the new entity would lead to a duopoly in the grocery sector.
It said that along with Tesco, currently the UK’s largest grocer, the pair would control “in excess of 60 per cent of the market”.
Prices could also rise, Morrisons warned, as the duopoly between the new entity and Tesco would make it possible for them to “compete less fiercely” for “any length of time”.
This comes after Lidl and Waitrose raised similar concerns with the CMA last week, which is seeking the view of interested parties like supermarkets and suppliers as part of its probe, publishing submissions as it receives them.
Lidl warned 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”.
Tesco has also weighed in on the debate, stating that there were few “customer benefits” of the merger.
“Without any growth opportunity or efficiencies to offer, branded suppliers will not be interested in reducing their prices,” the retail giant added.
When the proposed merger was first announced at the end of April, Sainsbury’s chief executive Mike Coupe said it would lead to £500 million in cost savings and further investment to lower prices by around 10 per cent on everyday items.
Last month, 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 increasing the squeeze on farmers.
Click here to sign up to Retail Gazette‘s free daily email newsletter
