The proposed merger between Sainsbury’s and Asda will be subjected to an in-depth investigation, the Competition and Markets Authority (CMA) has announced.
In August, the CMA opened its initial (Phase 1) investigation into the merger and confirmed that both supermarkets had requested a ‘fast-track’ referral to Phase 2.
The CMA has now announced, through its Phase 1 investigation, that the deal raises “sufficient concerns to be referred for a more in-depth review”.
In a statement, the authority 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 Phase 2 investigation will consist of a more in-depth review of the two supermarkets, led by an inquiry group chosen from the CMA’s independent panel members.
The group will be chaired by inquiry chair Stuart McIntosh. The role of the panel will be to gather evidence – through multiple customer surveys and engagement with other retailers, suppliers and industry bodies – to inform its detailed analysis.
A statement setting out in detail the issues that the inquiry group expects to investigate will be published in the coming weeks. Members of the public and other interested groups will be invited to share their views as part of the investigation.
The CMA’s full referral decision and expected timelines for its Phase 2 investigation will be published shortly on the Sainsbury’s-Asda merger case page.