CMA says its priority is to ‘assess if shoppers would face higher prices’ due to merger
Sainsbury’s and Asda have won extra time to respond to a competition authority investigation into their planned £7.3bn merger.
A competition appeal tribunal hearing in London on Friday ruled that the Competition and Markets Authority (CMA) must give lawyers for Sainsbury and Asda more time.
The supermarkets had asked for an extra 11 working days over the Christmas period. It is understood the new deadline, not yet confirmed by the CMA, will be around 21 December, earlier than the supermarkets’ 4 January request.
The CMA had sought to issue provisional findings early next year before a final report in March, but the supermarkets argued that the “unprecedented size and complexity” of the case meant they needed more time.
A CMA spokesperson said: “We are pleased that the court has confirmed it is for the CMA to set its own timetables and indicated that we do not need to grant an extension until 4 January, as requested by Sainsbury’s and Asda. The CMA will now consider how much more time to give the parties.
“Our first priority in this investigation has, and will continue to be, assessing if shoppers would face higher prices or a lower quality of service as a result of the merger and, if so, to prevent that from happening.”
In a statement, Sainsbury’s said: “The parties took this step reluctantly and look forward to re-engaging with the CMA and panel and working constructively with them going forward.”
The CMA investigation has weighed on the Sainsbury’s share price, which has fallen by almost a fifth since peaking in August. Asda has been owned by the US supermarket Walmart since 1999.
The CMA launched an in-depth investigation into the proposed merger in August amid concerns it could reduce competition in the sector.
The tie-up would create the largest supermarket chain in the UK by market share, leapfrogging Tesco. The newly formed group would have nearly 3,000 stores and annual sales of more than £50bn.
An initial investigation in September found a “realistic prospect of a significant lessening of competition” in 463 places in the UK where local supermarkets’ catchment areas overlapped.
The investigation is a major test for the CMA under the leadership of the former Conservative MP Andrew Tyrie, who was appointed in April.