Competition watchdog launches investigation into Sainsbury’s-Asda merger

CMA is inviting comment from interested parties until 4 June

The competition watchdog has launched its investigation into the proposed merger of Sainsbury’s and Asda, inviting comments on the deal from all interested parties.

The Competition and Markets Authority (CMA) said it will be considering whether the merger could result in a substantial lessening of competition within any market or markets in the UK for goods or services.

Sainsbury’s and Asda announced their plan to merge last month. The deal would result in the creation of the UK’s largest retailer, but has been met with concern from politicians and regulators.

Mike Coupe, chief executive of Sainsbury’s and the proposed boss of the combined group, has pledged price cuts of 10 per cent for customers, as well as promising no stores will be closed and no jobs lost.

The CMA said on Friday that its invitation to comment is the first part of the information gathering process, ahead of the formal investigation.

The watchdog also said it is “likely to proactively contact companies and organisations that are active in the markets affected by the proposed merger, or have valuable insights or evidence that could assist the CMA’s investigation”. This means the CMA will likely be in contact with suppliers, competitors, industry bodies and consumer organisations over the coming weeks.

A consumer survey aimed directly at customers will also make up part of the evidence for the CMA’s investigation, as well as hearings and meetings with interested third parties.

The CMA has set a deadline of 5pm on Monday 4 June for its initial information gathering process.

Retail consultancy Maximise UK said last week that the watchdog could force Sainsbury’s and Asda to sell up to 245 supermarkets across the UK. Research by Maximise showed the number of stores at risk is at least 6 per cent of the company’s combined total, which is 73 shops, but could increase dramatically depending on how the CMA makes its calculations.