Better together?

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:

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

Copyright Seán J Crossan, 25 April 2019

Stuck at red …

Photo by Erwan Hesry on Unsplash

Two interesting stories appeared in the UK media today which highlight the important role of regulatory bodies in the field of consumer protection. This is a topic which has already been considered in a number of recent posts (Watchdogs and No more heartbreak hotel?) both published on 14 March 2019.

The first story involves the Competition and Markets Authority (CMA) which has effectively shown the red light to the proposed merger between the two supermarket chains, ASDA and Sainsbury’s. Any newly merged company would have tremendous economic power and such a development could adversely affect the interests of UK consumers e.g. by restricting consumer choice. In response to this setback, both retailers have offered to sell off approximately 150 supermarkets and some petrol stations in the hope that the CMA may eventually be persuaded to allow the merger to go ahead.

The second story involves the Advertising Standards Agency (ASA) which has banned the use of adverts by 150 autism therapists who claim that a controversial practice, involving high doses of vitamin C and zinc, known as CEASE (Complete Elimination of Autistic Spectrum Expression) can ‘cure’ the condition. The ASA has issued these therapists with an enforcement notice telling them to stop making and advertising such claims that CEASE is an effective treatment for autism. According to the ASA, these assertions are being made without “proper scientific foundation” and “could seriously harm children”.

Links to the two stories can be found below:

Ad watchdog orders 150 ‘autism cure’ therapists to stop

Sainsbury’s and Asda offer to sell supermarkets to merge

The chains tell the UK competition watchdog they would sell up to 150 supermarkets to be able to merge.

Copyright Seán J Crossan, 22 March 2019

Fishy business?

There may only be a matter of weeks to Brexit (29 March 2019), but EU Law is very much alive and kicking in the UK.

Just to prove this, I came across a story on BBC Scotland’s website about an ongoing investigation by the European Commission into alleged anti-competitive practices at a number of Scottish fish farms:

Salmon farms raided as part of EU competition probe

Sites in Shetland, Stirling and Fife were visited

Copyright Seán J Crossan, February 2019