MPs have been warned that J Sainsbury’s (LON:SBRY) tie-up with Walmart’s Asda could have ‘unintended consequences’ which will hit British farmers and smaller suppliers hard, The Times has reported. The news came after the Competition and Markets Authority (CMA) disclosed this week that supermarkets and suppliers had voiced their concerns over the deal which will create Britain’s biggest grocer.
Sainsbury’s share price has advanced in London in today’s session, having added 1.06 percent to 313.90p as of 09:41 BST. The advance is largely in line with the broader market rally which has seen the benchmark FTSE 100 index add 1.08 percent to 7,685.99 points so far this morning.
Asda-Sainsbury’s deal concerns
The Times reported today that Lord Haskins, the former chairman of Northern Foods, had said that he believed that the tie-up between Sainsbury’s and Asda could ‘inescapably and powerfully’ affect vulnerable, independent producers. has written an article published in the newspaper today, in which he argues that regulators should examine “whether the emasculation of the food supply industry — apart from being disastrous for the companies involved — is also against the consumer interest” and risks hurting the economy.
The CMA, which is currently looking into the deal, published a summary of responses from interested parties this week, noting that a number of submissions had raised concerns about the merger’s impact on a national level, while others were worried about the tie-up’s effect on competition at a local level.
Analysts on FTSE 100 grocer
HSBC lifted its rating on Sainsbury’s to ‘hold,’ lifting its price target on the shares from 200p to 270p. According to MarketBeat, the blue-chip supermarket currently has a consensus ‘hold’ rating and an average price target of 292p.