The merger of Sainsbury’s and Asda could damage supermarket competition in 463 areas, the competition watchdog has warned.
The Competition and Markets Authority (CMA) believes there could be a ‘substantial lessening of competition’ if they were ‘insufficiently constrained’.
CMA has now confirmed, through its Phase 1 investigation, that the deal raises sufficient concerns to be referred for a more in-depth review.
Last week CMA launched the second phase of its investigation.
CMA reports that, with the companies being two of the largest grocery retailers in the UK, their stores overlap in hundreds of local areas, where shoppers could face higher prices or a worse quality of service.
These concerns will be considered further in the Phase 2 investigation, along with other issues raised so far with the CMA.
A statement from the supermarkets states: “We look forward to working with the CMA on the Phase 2 inquiry, where we expect it to conduct a full review of the market and take these changed market dynamics into consideration.”
An issues statement, setting out in detail the issues that the inquiry group expects to investigate, will be published in the coming weeks.
