Sainsbury’s and Asda are set to apply for judicial review of the competition watchdog’s probe into their proposed £12 billion merger, as the grocery giants request more time to consider the evidence.
The application, to be lodged today with the Competition Appeal Tribunal, will request a review of the Competition and Markets Authority’s (CMA) timetable and process on the grounds of the investigation’s “unprecedented scale and complexity”.
The CMA said it would defend its position in court, and was “not willing to compromise on the thoroughness or objectivity” of the investigation.
Both Sainsbury’s and Asda have asked the CMA for an additional 11 working days over the Christmas period to respond to a large amount of material, which they say was only recently provided to them.
The retailers also argue that the current timetable does not give them or the CMA “sufficient time to provide and consider all the evidence, given the unprecedented scale and complexity of the case”.
“This is a case of unprecedented size and complexity and we have a responsibility to our customers and colleagues to ensure that we and the CMA have enough time to make and consider all the facts and evidence,” Sainsbury’s and Asda said in joint statement.
“This is not a decision we have taken lightly. It is about ensuring a thorough process and reasonable timetable.
“We remain confident in the case for merging the businesses and the significant customer benefits.”
The CMA has insisted that its timeline is typical for an investigation.
“As you would expect, investigating any merger of this size requires assessing a large volume of material in a short time-frame, and it is not unusual for the companies involved to do this in the timelines we have been working to with Sainsbury’s and Asda,” a spokesman for the competition watchdog said.
“We have done everything we can to aid their consideration of this work, whilst still ensuring we are able to meet our legally-binding deadline. This includes extending certain administration timelines where appropriate.
“If we gave the companies the extra time they are now asking for, it would put our ability to complete the investigation by the required deadline at very serious risk.
“We are not willing to compromise on the thoroughness or objectivity of our investigation and will robustly defend this case in court.”
The news comes amid a slew of recent reports of suppliers and competing retailers coming forward and warning on the proposed merger.
Tesco, Morrisons, Lidl and Waitrose have all expressed concerns about price rises and competition fairness while the National Farmers’ Union warned that the merger could reduce the choice and innovation of products and increase the squeeze on farmers.
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.