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Competition watchdog raises concerns about Sainsbury’s Asda merger

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19/09/2018
The competition watchdog has referred the proposed merger between Sainsbury’s and Asda for a more in-depth review after identifying “sufficient concerns” during its initial investigation.

The so-called Phase 2 investigation will be led by an independent panel who will gather evidence from customer surveys and engagement with other retailers, suppliers and industry bodies.

The Competition and Markets Authority (CMA) said: “The companies are two of the largest grocery retailers in the UK and their stores overlap in hundreds of local areas, where shoppers could face higher prices or a worse quality of service.”

These concerns will be considered further in the Phase 2 investigation, along with other issues raised so far with the CMA – including those relating to fuel, general merchandise (such as clothing) and increased ‘buyer power’ over suppliers.

The CMA opened its investigation into the merger in August, probing whether the multi-billion pound deal could lead to less choice, higher prices and worsening quality of service for consumers if it gets the go ahead.

merger between the two supermarket giants was first announced in April where the brands said they expected their stronger purchasing power would deliver lower prices – up to 10% on many frequently bought products.

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