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A formal investigation into the proposed merger between Sainsbury’s and Asda has been launched by the Competition and Markets Authority (CMA).
Since the merger was announced on 30 April 2018, the competition and consumer authority has been gathering the information needed to start its formal investigation. The CMA said it will now begin “the first phase of its detailed assessment into how the deal could affect competition for UK shoppers”.
Asda has 255 pharmacies, and the proposed merger has prompted concerns about their future, given that Sainsbury’s sold its pharmacy business to Lloydspharmacy in 2016.
The investigation, which began on 23 August 2018, will consider whether the deal could lead to less choice, and therefore higher prices or worse quality services, across the range of products sold by both businesses.
The CMA said it will also look at whether the merged company could use its increased buyer power to squeeze suppliers and whether this could have potential knock-on effects for shoppers.
Andrea Coscelli, chief executive of the CMA, said: “We will carry out a thorough investigation to find out if this merger could lead to higher prices or a worse quality of service for shoppers, and will not allow it to go ahead unless any concerns we find are fully dealt with.”
