Sainsbury's-Asda merger in jeopardy

Sainsbury’s-Asda merger in jeopardy”:

The UK’s competition watchdog has said the proposed tie-up between Sainsbury’s and Asda could push up prices and cut choice for customers.

The Competition and Markets Authority (CMA) said it was “likely to be difficult” for the chains to “address the concerns”.

The CMA also said the merger could lead to a “poorer shopping experience”.

Sainsbury’s boss told the BBC the findings were “outrageous” and he would continue to challenge them.

Chief executive Mike Coupe described the CMA’s analysis as “fundamentally flawed” and said the firm would be making “very strong representations” to it about its “inaccuracy and lack of objectivity”.

“They have fundamentally moved the goalposts, changed the shape of the ball and chosen a different playing field,” he told the BBC.

“This is totally outrageous.”

Sainsbury’s shares were down more than 12% in early Wednesday trading.

These are the CMA’s provisional findings and the firms will have a chance to respond, before it publishes its final decision on 30 April.

The watchdog said it had identified two potential remedies to the loss of competition: either blocking the merger entirely or forcing the sale of “assets and operations”, including stores or even the Sainsbury’s or Asda brands.

However, it added that it “currently considers that there is a significant risk that a divestiture will not be effective in this particular case”.

The two chains would need to sell “sufficient assets and operations to enable any purchaser to compete effectively as a national in-store grocery retailer”.

It added that it may not be possible to achieve an effective solution to the loss of competition “without also divesting one or other of the Asda or Sainsbury’s brands, in addition to physical assets and operations”.

Sainsbury's Asda chart

‘Lower prices’

The deal would create a business accounting for £1 in every £3 spent on groceries with a 31.4% market share and with 2,800 stores.

Stuart McIntosh, chair of the CMA’s independent inquiry group, said: “We have provisionally found that, should the two merge, shoppers could face higher prices, reduced quality and choice, and a poorer overall shopping experience across the UK.

“We also have concerns that prices could rise at a large number of their petrol stations.”

However, in a joint statement, Sainsbury’s and Asda said combining the two chains would create “significant cost savings, which would allow us to lower prices”.

“Despite the savings being independently reviewed by two separate industry specialists, the CMA has chosen to discount them as benefits.”

line

Analysis

Dominic O’Connell, Today business presenter

Supermarket bosses know that British competition regulators have always had a strong interest in the grocery market. There has been a string of inquiries over the last two decades, both into individual deals and the bigger question of how well the market serves consumer interests.

So Sainsbury’s board members would have been nervous when they proposed a takeover of Asda last year – but they did at least have the encouragement that the Competition and Markets Authority (CMA) had approved a tie-up between Tesco and Booker just a few months earlier.

Unfortunately for them, the light at the end of the tunnel turned out to be an oncoming train.

The regulator has crushed Sainsbury’s plans. There is no veto, but the strong language used, and the breadth of the problems found, suggest there is no way back.

One comment

  1. Hey, how’s it going?

    I want to pass along some very important news that everyone needs to hear!

    In December of 2017, Donald Trump made history by recognizing Jerusalem as the captial of Israel. Why is this big news? Because by this the Jewish people of Israel are now able to press forward in bringing about the Third Temple prophesied in the Bible.

    Jewish Rabbis have publicly announced that their Messiah will be revealed in the coming years who will be a leader and spiritual guide to all nations, gathering all religions under the worship of one God. They deny Jesus as their Messiah, and the Bible tells us this Jewish Messiah will be the counterfiet that will bring about a false peace, and ultimatley the great tribulation.

    They even printed a coin to raise money for the Temple with Donald Trumps face on the front and with king Cyrus'(who built the second Temple) behind him. On the back of the coin is an image of the third Temple.

    More importantly, the power that runs the world wants to put a RFID microchip in our body making us total slaves to them. This chip matches perfectly with the Mark of the Beast in the Bible, more specifically in Revelation 13:16-18:

    “He causes all, both small and great, rich and poor, free and slave, to receive a mark on their right hand or on their foreheads, and that no one may buy or sell except one who has the mark or the name of the beast, or the number of his name.

    Here is wisdom. Let him who has understanding calculate the number of the beast, for it is the number of a man: His number is 666.”

    Referring to the last days, this could only be speaking of a cashless society, which we have yet to see, but are heading towards. Otherwise, we could still buy or sell without the mark amongst others if physical money was still currency. This Mark couldn’t be spiritual because the word references two different physical locations. If it was spiritual it would just say in the forehead. RFID microchip implant technology will be the future of a one world cashless society containing digital currency. It will be implanted in the right-hand or the forehead, and we cannot buy or sell without it! We must grow strong in Jesus. AT ALL COSTS, DO NOT TAKE IT!

    “Then a third angel followed them, saying with a loud voice, “If anyone worships the beast and his image, and receives his mark on his forehead or on his hand, he himself shall also drink of the wine of the wrath of God, which is poured out full strength into the cup of His indignation. He shall be tormented with fire and brimstone in the presence of the holy angels and in the presence of the Lamb. And the smoke of their torment ascends forever and ever; and they have no rest day or night, who worship the beast and his image, and whoever receives the mark of his name” (Revelation 14:9-11).

    People have been saying the end is coming for many years, but we needed two key things. One, the Third Temple, and two, the technology for a cashless society to fulfill the prophecy of the Mark of the Beast.

    Visit http://WWW.BIBLEFREEDOM.COM to see proof for these things and much more!

    If you haven’t already, it is time to seek God with all your heart. Jesus loves you more than you could imagine. He wants to have a relationship with you and redeem you from your sins. Turn to Him and repent while there is still hope! God bless!

    Like

Comments are closed.