Photo by Mohammad Sanaei on Unsplash
Better together? Not if you’re Asda and Sainsbury’s supermarket chains.
As of today (25 April 2019), the statutory regulator, the UK Competition and Markets Authority (CMA) has decided that the proposed merger between the two businesses should not take place.
As the above scenario demonstrates, the CMA has been given the power by the UK Parliament to make legally binding decisions of this nature. Theoretically, statutory regulators exist (in the main) to ensure that large business organisations do not acquire an overwhelmingly, dominant market position where they can ‘kill off’ competitors and substantially reduce consumer choice.
Stuart McIntosh, chair of the CMA inquiry group, said:
“It is 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 that 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.”
The CMA press release can be read using the link below:
https://www.gov.uk/government/news/cma-blocks-merger-between-sainsburys-and-asda
Sainsbury’s-Asda merger ‘would have harmed competition’.
A link to how the story was reported by Sky News can be found below:
Sainsbury’s/Asda mega merger is formally blocked by CMA
http://news.sky.com/story/sainsburysasda-mega-merger-is-formally-blocked-by-cma-11702941
Copyright Seán J Crossan, 25 April 2019
Seán Crossan's Scots Law 