The Competition and Markets Authority (CMA) today blocked the Sainsbury’s and Asda merger, confirming its provisional findings from February. The CMA said that the proposed deal would have led to increased prices in stores, online and at many petrol stations throughout the UK. Richard Curry, partner in Retail & Leisure, was among the experts who shared their reaction with Retail Gazette, European Supermarket Magazine and FoodBev Media:
“The problem Sainsbury’s and Asda faced is that there was a clear lack of credible competition for the CMA to turn to, and fewer still who would be interested in the stores that would have needed to have been disposed of.
“Particularly when you factor in the fuel retail element, the only two alternatives that offer the same product range and shopping experience are Tesco and Morrisons – who are unlikely to be interested in enough of the large format stores which might have made a difference to the CMA.
“People are still waiting to see what Amazon’s next move in the UK market will be. With the Whole Foods business, and the recent partnership with Casino in Europe, food retail is an area of interest for them.
“It would be ironic indeed were Amazon to end up buying some or all of the Asda portfolio given Walmart’s exit from the UK to focus on the US is almost entirely driven by a desire to defend against Amazon on home soil.”
Richard also spoke to Bloomberg the day before the ruling, commenting that “Sainsbury’s will be holding out for a miracle. The CMA has given every indication that they won’t approve the merger.”
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