Sainsbury’s share price: Supermarkets and suppliers flag concerns over Asda tie-up

Competition watchdog to take views into account as it probes merger

Sainsbury’s share price: Supermarkets and suppliers flag concerns over Asda tie-up

Supermarkets and suppliers have voiced their concerns over J Sainsbury’s (LON:SBRY) proposed merger with Walmart’s Asda, the Competition and Markets Authority (CMA) has disclosed. The news comes after the competition watchdog recently kicked off its scrutiny of the tie-up which is set to create Britain’s biggest grocer, surpassing current market leader Tesco (LON:TSCO).

Sainsbury’s share price has fallen into negative territory this morning, having given up 0.61 percent to 308.10p as of 08:56 BST. The decline is largely in line with losses in the broader UK market, with the benchmark FTSE 100 index currently standing 0.71 percent lower at 7,576.94 points. The group’s shares have added just under a fifth to their value over the past year, as compared with less than a one-percent gain in the Footsie.

Watchdog updates on probe

The CMA published a summary of responses from interested parties commenting on the Sainsbury’s-Asda tie-up, noting that it had received submissions from a wide variety of parties, including other supermarket groups, wholesalers and suppliers. The watchdog noted that a number of submissions had raised concerns about the merger’s impact on national level, arguing that it “would lead to increased concentration in the market and fewer national players, with two companies – Tesco and the combined Sainsbury’s/Asda – holding high market shares”.

Others meanwhile flagged concerns about the tie-up’s impact on competition at a local level, with some pointing to specific local areas in which the parties’ stores overlap.

CMA said that it would take the views into consideration as the investigation develops.

Grocer working closely with CMA

A spokesman for Sainsbury’s meanwhile told The Telegraph that the blue-chip grocer was “working closely with the CMA and look forward to making our case when the formal review begins”.

As of 09:13 BST, Tuesday, 19 June, J Sainsbury plc share price is 308.60p.

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