Sainsbury's and Asda merger referred for second investigation after 'troubling' concerns

Announced today (September 19), the proposed merger between J Sainsbury PLC and Asda Group Ltd is being referred for a ‘phase two’ investigation.

Last month, the Competition and Markets Authority (CMA) opened phase one of its investigation into the merger and announced the companies had requested a ‘fast-track’ referral to phase two.

The CMA has reportedly confirmed that the deal raises ‘sufficient’ concerns to be referred for a more detailed review.

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 two investigation, along with other issues raised so far with the CMA - including those relating to fuel, general merchandise and increased ‘buyer power’ over suppliers.

This particular review is to be led by an inquiry group chosen from the CMA’s independent panel members, chaired by Stuart McIntosh, and the other members being Roland Green, John Thanassoulis, Richard Feasey and Claire Whyley.

The group will gather evidence - in particular through multiple customer surveys and engagement with other retailers, suppliers and industry bodies - to inform its analysis.

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

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