Competition watchdog to investigate merger of Sainsbury’s and Asda

London, UK: The Competition and Markets Authority has launched a formal investigation into whether the proposed merger between Sainsbury’s and Asda could hurt consumers and harm small suppliers.

The watchdog said it would look at how the £12bn deal could lead to price increases and whether the enlarged company could use its increased buying power to squeeze suppliers.

Andrea Coscelli, the chief executive of the CMA, said: “About £190bn is spent each year on food and groceries in the UK, so it’s vital to find out if the millions of people who shop in supermarkets could lose out as a result of this deal.

“We will carry out a thorough investigation to find out if this merger could lead to higher prices or a worse quality of service for shoppers and will not allow it to go ahead unless any concerns we find are fully dealt with.”

The GMB union welcomed the move. Gary Carter, GMB national officer, said: “It is only right a deal this size – with all the implications for consumer choice, jobs and the high steet – is subject to proper and very detailed scrutiny. Asda and Sainsbury’s say they intend to keep the current brands, run the supermarkets separately and that there will be no store closures. We hope the CMA will put this to the test.”

The combined group would be the UK’s biggest retail chain with 2,800 stores and 31.4% of the grocery market.

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