UK regulator worried over Sainsbury-Asda merger impact

20th February, 2019 09:29:17 printer

LONDON: The planned mega-merger of British supermarket giant Sainsbury’s and Walmart-owned Asda raises “extensive competition concerns” and could spark higher prices and less choice, regulators warned Wednesday.

The Competition and Markets Authority (CMA) watchdog, revealing the provisional findings of an in-depth probe, added it could potentially block the deal — or require both companies to sell a “significant” number of stores and other assets including one of the two brands, reports AFP.

The regulator cautioned it would be “difficult for the companies to address the concerns it has identified”, as its remedies seek to “recreate the competitive rivalry lost through the merger”.

“The CMA has provisionally found extensive competition concerns as part of its in-depth investigation of the proposed merger,” the watchdog said in a statement that sparked immediate criticism from the two retail giants.

Sainsbury’s and Asda, the nation’s second and third biggest supermarket chains respectively, unveiled merger plans in April 2018 to create a retail king that would leapfrog UK number one Tesco. The CMA warned Wednesday that the deal “could lead to a worse experience for in-store and online shoppers across the UK through higher prices, a poorer shopping experience, and reductions in the range and quality of products”.