Sainsbury's and Asda May be Blocked From Merging

By Gary Cutlack on at

The Competition and Markets Authority has been weighing up the pros and cons of allowing Sainsbury's and Asda to conduct a super-merger of themselves, and appears to be slowly moving towards blocking the deal entirely.

The CMA's initial report is quite damining of the prospect of the two grocery giants combining, and is warning that it could lead to higher prices for food and fuel, along with less choice and lower quality levels, adding that there could be a "...a substantial lessening of competition at both a national and local level" if the merger was allowed to go ahead.

This isn't yet a firm "No" to the idea, mind, as some steps could be taken that may get the merger approved. Some local branches could be sold off to rivals, and perhaps even the Sainsbury or Asda brands themselves could be disposed of before the physical assets are combined, opening up areas where there's currently some overlap between the two retailers to their competitors.

The CMA says it's likely to be difficult for the two supermarkets to unbundle enough of their offerings in order to make a merger palatable to authorities, mind, so it could well be blocked. Final decisions will be made public on April 30. [GOV via BBC]