Asda and Sainsbury’s mega-merger blocked by regulator

The merger between Asda and Sainsbury's has been #cancelled

The Competition and Markets Authority (CMA) has blocked the potential merger between two of Britain's biggest supermarkets: the Walmart-owned Asda and rivals Sainsbury's. Despite the fact that the British public had already come up with the perfect name for the joint venture, the move has been halted by the CMA because they believe it will leave customers worse off in the long run. It said that the merger would cause prices to rise and the quality and choice of products to fall.

The chair of the inquiry group at CMA, Stuart McIntosh, explained: “It’s our responsibility to protect the millions of people who shop at Sainsbury’s and Asda every week,”

“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.”

Had the deal gone through it would have resulted in the UK's biggest supermarket chain, with Asda and Sainsbury's (second and third biggest in market share respectively) leapfrogging Tesco, which currently holds a 27.4% share of the grocery market.

Asda currently has a 15.4% share whilst Sainsbury's are close behind with 15.3%.

Sainsbury’s CEO Mike Coupe said: “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 £1 billion out of customers’ pockets".

The supermarket did, however, confirm that they wouldn't be appealing the decision.