Committee Chairs write to CMA on Asda/Sainsburys merger
3 May 2018
The EFRA and BEIS Committees have today written a joint letter to the Competition and Markets Authority in relation to the proposed Asda and Sainsburys merger.
The letter raises concerns over the impact that the merger will have on the grocery supply chain, particularly regarding the market dominance that this would create for the new Asda/Sainsburys business and Tesco Plc.
Of interest to the Committees is the timing, length and scope of the CMA investigation, as well as the criteria that will be used to determine whether the merger will create local monopolies or require the stores to divest premises.
Chair's comments
Rachel Reeves, Chair of the BEIS Committee, said:
“This merger threatens customer choice, hands yet more power to mighty supermarket players and heaps more pressure on small and medium suppliers. The CMA needs to be a champion of consumers and it must look closely at the impact of this merger on the supply chain as well as the effect on competition in the supermarket sector”.
Neil Parish, Chair of the EFRA Committee said:
“Grocery retailers don't have a gleaming record of treating suppliers well and the Grocery Code Adjudicator's 2017 survey found that Asda was the worst grocery retailer in the eyes of its suppliers. The cost savings being promised through this merger must not come through squeezing those further down the supply chain. I am also concerned that with two supermarkets taking up around 60% of the market, suppliers would be more reluctant to raise complaints about unfair practices.”
Further information
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