The UK’s Competition and Markets Authority (CMA) has referred the proposed merger between Sainsbury’s and Asda for an ‘in-depth’ Phase 2 investigation.
The CMA said on its website that it was carrying out the investigation because the merger may create a situation that would result in a ‘substantial lessening of competition within a market or markets in the United Kingdom for goods or services, including in the retail supply of groceries in-store within local areas around each store operated by J Sainsbury Plc and Asda Group Ltd and at a national level’.
The Phase 2 investigation follows on from the Phase 1 process, which commenced in May.
Inquiry Group
The CMA has appointed an inquiry group to lead the investigation, led by Stuart McIntosh, an economist and former group director of Ofcom, the communications regulator.
Also sitting on the inquiry group will be Richard Feasey, former group public policy director at Vodafone Group, Roland Green, a former legal and policy adviser to the CMA and the Competition Commission, John Thanassoulis, Professor of Financial Economics at Warwick Business School (WBS) and Claire Whyley, a professional researcher and policy analyst.
The Phase 2 process has a statutory deadline of 5 March 2019.
Timing Is Everything
Commenting, Catherine Shuttleworth at Savvy said, “the announcement this morning by the CMA that they will now start their review and investigation into the proposed Sainsbury and Asda merger is an example of spectacular timing!
“On the day that Tesco announce to the world their strategy on meeting the challenge of the discounters and in effect their way to reclaim value , they and we, are reminded that their dominance in the UK food retail market is now under real threat from every direction .
“Never has there been a more important moment to be clear about your strategic direction. This brings into sharp focus the unstopppable and seismic shift in UK grocery and the reason why staying the same is no longer an option.”
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
