Extra time allowed in the Asda Sainsbury merger investigation

First published by Author on December 28, 2018 in the following categories: Industry Mergers and tagged with cma | marktet sharing | mergers

Extra time has been allowed for the lawyers involved in the Asda Sainsbury merger as the CMA looks to protect consumer rights and ensure healthy competition remains.

When news of the £7.3bn Asda Sainsbury merger hit the news, the CMA (Competition and Markets Authority) were quick to act. Their role as the UK’s competition watchdog is to ensure that the behaviours of businesses in a market does not come at a detriment to the consumer. In this investigation, the concern is over whether prices could increase as the merger would lead to the companies overtaking Tesco as the largest supermarket chain in the UK.

The extra time that has been allowed is for the lawyers acting in the Asda Sainsbury merger venture to respond to a number of concerns that have been raised.

The CMA’s investigation into the Asda Sainsbury merger

The CMA’s investigation into the Asda Sainsbury merger is undoubtedly a complex matter. This multi-billion-pound industry has a number of key players competing to ensure for healthy competition.

Two of the largest merging together could lessen competition to the determine of the consumer. It could amount to a breach of important competition law.

The CMA launched an in-depth investigation intro the merger earlier this year. Provisional findings by the CMA found that there may be competition concerns that could happen as a direct result of the merger.

How can the consumer be affected by the Asda Sainsbury merger?

The consumer could be hugely affected by the Asda Sainsbury merger. Two big players in the market joining forces can lessen competition, especially as they’re set to become the largest chain in the UK.

The CMA’s provisional findings stated that there is a “realistic prospect of a significant lessening of competition” in some areas of the UK.

In a statement over their key priorities, they said:

“Our first priority in this investigation has, and will continue to be, assessing if shoppers would face higher prices or a lower quality of service as a result of the merger and, if so, to prevent that from happening.”

At the end of the day, the focus must be on ensuring that there are no breaches of important competition law. In what is one of the most important industries in any country, the consumer must be protected from higher prices that stem from reduced competition.