Sainsbury’s and Asda to challenge CMA probe with judicial review

Sainsbury’s and Asda are set to take the Competition and Markets Authority (CMA) to a judicial review believing they have not been given enough time to effectively argue their case for the merger.  

The investigation into the merger by the CMA is expected to be completed by the start of March, however the two supermarket grocers feel as though the current timetable does not allow them or the CMA “sufficient time to provide and consider all the evidence given the unprecedented scale and complexity of the case”.

They also argued that both parties have “engaged constructively” with the CMA to date and have made “repeated requests for additional time”.

In a joint statement Sainsbury’s and Asda said: “J Sainsbury plc and Asda Group Ltd will today lodge an application with the Competition Appeal Tribunal for a judicial review of the Competition and Markets Authority (CMA) phase two investigation into their proposed merger.

“This application requests a review of the timetable and process, reflecting both parties’ view that the current timetable does not give the parties or the CMA sufficient time to provide and consider all the evidence given the unprecedented scale and complexity of the case.

“Both parties have engaged constructively with the CMA to date and have made repeated requests for additional time. Specifically, we have asked the CMA for an additional 11 working days over the Christmas period to respond to a large amount of material recently provided to us.

“We are confident in the merits of the deal and our ability to deliver the synergies. By bringing our two businesses together, we will invest further in range, quality and customer service, while lowering prices and reducing the cost of living for millions of UK households.”

In response to the announcement the CMA said that its “first priority” in the investigation “has, and will continue to be, assessing if shoppers would face higher prices or a lower quality of service as a result of the merger”  and if that was the case to “prevent that from happening”.

A CMA spokesperson told Retail Sector: “We began to engage with the companies involved as soon as they announced their intention to merge at the end of April, to make sure they had the opportunity to fully put forward their views. Investigating any merger of this size requires assessing a large volume of material in a short timeframe, 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.

“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.”

It added: “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.  As with all of our merger reviews, we construct our timetable to ensure that everyone has the chance to have their say, including customers, the companies involved and suppliers.”

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