Sainsbury's chief executive Mike Coupe has accused the CMA of “taking money out of customers' pockets” after the watchdog said it could block the proposed Sainsbury’s-Asda merger due to competition concerns.
Despite Coupe’s pledge to create 10 per cent savings for customers, the Competition & Markets Authority’s provisional findings suggested the merger could raise prices, create less choice and a “poorer overall shopping experience”.
The CMA said the merger would create a “substantial lessening of competition at both a national and local level”, especially in areas where Sainsbury’s and Asda stores overlap.
In a joint statement, the retailers hit back at the CMA’s findings, accusing it of “moving the goalposts” in the latest stage of what has been a fraught investigation.
In December the retailers lodged an appeal in the Competition Appeal Tribunal against the CMA requesting more time to deal with case material, the court deciding in their favour shortly before Christmas.
Speaking on Radio 4 this morning, Coupe elevated the attack on the CMA, saying it was using “unprecedented” criteria, and had dismissed their evidence to make an “absurd” finding.
“Clearly we’re very disappointed. They’ve fundamentally moved the goalposts and not only that, they’ve changed the shape of the ball and chosen a completely different playing field,” Coupe said.
“Customers are the main losers. We believe that we will be able to lower prices in UK markets, we’ve made that case very strongly to the CMA and they’ve completely dismissed our evidence.”
Coupe added that Sainsbury's and Asda will “fight all the way through”, and did not rule out taking legal action should they fail to gain CMA approval. “We believe ultimately it’s great news for customers. In the end we will lower prices for customers and we believe the CMA’s analysis is fundamental flawed.
“They allowed the Tesco-Booker deal to go through with absolutely no divestments and that is just absurd. They have applied a set of criteria which are unprecedented in the UK and indeed I would argue unprecedented in the world. In the end they are taking money out of customers' pockets."
Following the CMA's findings, Stuart McIntosh, chair of the independent inquiry group carrying out the investigation, said: “These are two of the biggest supermarkets in the UK, with millions of people purchasing their products and services every day.
“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.”
McIntosh said the supermarkets will now have the chance to respond to their provisional findings, but the CMA revealed blocking the merger is one option for addressing their concerns, as well as requiring the companies to sell off “a significant number” of their assets.
Sainsbury’s and Asda have until 30 April to respond to the CMA’s provisional findings.