CMA refers Sainsbury’s-Asda merger for further investigation

The Competition and Markets Authority (CMA) has announced the proposed merger of Sainsbury’s and Asda is to be referred for an in-depth ‘Phase 2’ investigation, after finding it raises “sufficient concerns”.

The CMA said concerns arise from both grocery retailers in the UK possessing stores that overlap in hundreds of local areas, where shoppers could face higher prices or a worse quality of service.

It said these concerns will be considered further in the second investigation, along with other issues that have been raised with the CMA – including those relating to fuel, general merchandise and increased ‘buyer power’ over suppliers.

The Phase 2 investigation will be led by an inquiry group chosen from the CMA’s independent panel members, and will be chaired by Stuart McIntosh, with the other members including Roland Green, John Thanassoulis, Richard Feasey and Claire Whyley.

An issues statement, setting out in detail the issues that the inquiry group expects to investigate, will be published in the coming weeks.

Mike Coupe, group CEO of J Sainsbury PLC and Roger Burnley, president and CEO of Asda, said in a joint statement to Retail Sector: “We expected the CMA would want to undertake an in-depth review and look forward to engaging with the CMA and Panel on this next phase of the process.”