FDBusiness.com

Merger Between Sainsbury’s and Asda Blocked

 Breaking News
  • Kelsen Group Being Sold For $300 Million CTH, a Belgian holding company affiliated to the Ferrero Group, has agreed to acquire Kelsen Group, the Danish biscuit producer, from US-based Campbell Soup Company for $300 million. The proceeds from the divestiture will allow Campbell to reduce debt. Based in Nørre Snede, Denmark, Kelsen is a producer of quality baked snacks whose primary brands include [...]...
  • Bidfood Expands its Network Bidfood, the UK foodservice wholesaler supplying fresh, frozen, ambient and non-food related products to customers in a wide range of sectors within the foodservice and catering industries, has announced the acquisition of Elite Fine Foods. This is the latest business to join Bidfood’s successful network of independent businesses trading alongside other companies in the delivered [...]...
  • Nestlé Invents First 70% Dark Chocolate Made Entirely From Cocoa Fruit Nestlé has announced it has created a unique chocolate made entirely from the cocoa fruit, using the beans and pulp as the only ingredients and therefore not adding any refined sugar. Nestlé plans to introduce the first product in Japan in the autumn of this year through its KitKat Chocolatory. Further products in other countries [...]...
  • Always Coca-Cola – World’s Favourite Soft Drink Tops Brand Ranking American drinks giant, Coca-Cola, retains its position as the world’s most valuable soft drinks brand after recording a 19% increase in brand value to US$36.2 billion, according to the latest report by Brand Finance, the world’s leading independent brand valuation consultancy. The brand has further widened its lead, as second-placed Pepsi suffers an 8% drop [...]...
  • Fi Europe & Ni 2019 – 3-5 December – Villepinte Parc des Expositions, Paris For more than 30 years Fi Europe & Ni (Natural ingredients) has been the world’s leading food and beverage ingredients sourcing platform. Its unique influence is underlined by the fact that more than 25 per cent of all annual food and beverage manufacturer ingredient procurement budgets are influenced by a visit to the show. Fi Europe [...]...

Merger Between Sainsbury’s and Asda Blocked

Merger Between Sainsbury’s and Asda Blocked
April 25
15:22 2019

The Competition and Markets Authority (CMA) has blocked the £7.3 billion proposed Sainsbury’s-Asda merger after finding it would lead to increased prices in stores, online and at many petrol stations across the UK. In its final report, the CMA found that UK shoppers and motorists would be worse off if Sainsbury’s and Asda – two of the country’s largest supermarkets – were to merge. This is due to expected price rises, reductions in the quality and range of products available, or a poorer overall shopping experience.

Following an in-depth investigation, a group of independent CMA panel members concluded that the deal would result in a substantial lessening of competition at both a national and local level for people shopping in supermarkets. This would mean shoppers right across the UK would be affected, not just in the areas where Sainsbury’s and Asda stores overlap.

Stuart McIntosh, chair of the inquiry group, said: “It’s 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 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’s investigation found that, as well as affecting in-store customers, the merger would result in increased prices and reduced quality of service, such as fewer delivery options, when shopping online. Furthermore, it would lead to motorists paying more at over 125 locations where Sainsbury’s and Asda petrol stations are located close together.

In making the decision to prohibit the merger, the inquiry group reviewed a wide range of issues in detail, such as the increased competition presented by discount stores like Lidl and Aldi, and how new or expanding competitors could affect the retail market, including online. Whilst the panel carefully considered these industry developments, they did not allay its serious competition concerns about the merger.

The group also carefully reviewed the companies’ statement they would cut some prices. However, detailed analysis of the impact of the deal clearly showed that, overall, the merger would reduce competition in the market and is more likely to lead to price rises than price cuts.

This final decision to block the deal follows the publication of the CMA’s provisional findings and a subsequent consultation period, during which the CMA reviewed responses from a variety of interested parties, including Sainsbury’s and Asda themselves.

The combination of Sainsbury’s and Asda would have created one of the UK’s leading grocery, general merchandise and clothing retail groups, with combined revenues of about £51 billion for 2017.

As a result of the prohibition of the merger by the CMA, Sainsbury’s, Walmart and Asda have mutually agreed to terminate the transaction.

Sainsbury’s CEO, Mike Coupe, said: “The specific reason for wanting to merge was to lower prices for customers. The CMA’s conclusion that we would increase prices post-merger ignores the dynamic and highly competitive nature of the UK grocery market. The CMA is effectively taking £1 billion out of customers’ pockets. Sainsbury’s is a great business and I am confident in our strategy. We are focused on offering our customers great quality, value and service and making shopping with us as convenient as possible.”

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • October 17, 2019Future Food-Tech
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here



Advertisements