The Competition and Markets Authority has blocked the Sainsbury’s-Asda merger, claiming it would lead to increased prices.
The CMA investigation said UK shoppers would be hit by increases in stores, online and at petrol stations if the two supermarket chains were to merge.
Stuart McIntosh, chair of the inquiry group, said: “Following our in-depth investigation, we have found this deal would lead to increased prices, reduced quality and choice of products, or a poorer shopping experience for all of their UK shoppers.
“We have concluded that there is no effective way of addressing our concerns, other than to block the merger.”
In its final report, it said shoppers would be hit by price increases, even in locations where the brands had no overlap. It added that online shoppers should expect fewer delivery options and motorists would be forced to pay more in the 125 locations where Sainsbury’s and Asda petrol stations are located close together.
The CMA said discount competitors including Lidl and Aldi did not “allay its serious competition concerns”. It added that pledges to cut prices would fail to negate the inevitable price increases.
Sainsbury’s chief executive Mike Coupe said: “The specific reason for wanting to merge was to lower prices for customers. The CMA’s conclusion that we would increase prices post-merger ignores the dynamic and highly competitive nature of the UK grocery market. The CMA is today effectively taking £1bn out of customers’ pockets.”
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