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CMA outlines scope of Sainsbury's-Asda merger investigation

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CMA outlines scope of Sainsbury's-Asda merger investigation

The U.K.'s Competition and Markets Authority on Oct. 16 announced the criteria of its investigation into the proposed merger between J Sainsbury PLC and Walmart Inc.-owned ASDA Stores Ltd.

In addition to groceries bought both in-store and online, the regulator intends to scrutinize fuel and other items including toys, small electricals and children's clothing at a local and national level.

The CMA will evaluate the potential consequences of the merger for shoppers through higher prices or reductions in the range or quality of products and for rival retailers including Lidl Stiftung & Co. KG and Aldi Einkauf GmbH & Co. oHG. It will also look at whether the merged company could use its increased buying power to squeeze suppliers.

"Millions of people shop at Asda and Sainsbury's every week, so it is essential we carry out a thorough investigation into their proposed merger. Our job is to find out whether the merger will result in people paying more or being faced with less choice or a poorer quality shopping experience," Stuart McIntosh, chair of the independent inquiry group carrying out the investigation, said in a statement.

Provisional findings of CMA's review will be presented early next year, with March 5, 2019, as the deadline for the final report.

In September, the CMA completed the first phase of its investigation into the deal and concluded that the merger between Asda and Sainsbury's would reduce the competition locally and nationally.