Sainsbury’s (LON:SBRY) chief executive expects the UK Competition and Markets Authority (CMA) to demand store disposals to clear the grocer’s merger with Walmart’s Asda, The Telegraph reports. The comments came as Mike Coupe was grilled over MPs over the tie-up.
Sainsbury’s share price has fallen into the red in today’s session, having given up 0.76 percent to 314.40p as of 10:22 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed marginally into positive territory and currently standing 0.03 percent higher at 7,629.48 points.
CMA ‘likely’ to demand store disposals
The Telegraph reported yesterday that Sainsbury’s chief executive Mike Coupe had told the environment, food and rural affairs committee that there were “less than 100 but probably more than 50” towns and cities in the country with just a Sainsbury’s and Asda. The newspaper notes that when asked whether he accepted that the CMA might demand stores are sold off to rivals to allay fears that the merger would lead to less choice for consumers, he replied that he thought it was ‘likely’.
The competition watchdog, which is currently probing the tie-up,’ 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.
Yesterday’s comments came as MPs grilled Coupe and his counterpart at Asda Roger Burnley over the merger between Asda and Sainsbury’s, which stands to create the UK’s biggest supermarket. The Times reported that Neil Parish, chairman of the committee, had told the two chief executives that there was no logic to the ‘bizarre’ deal, which he called a ‘financial fix’ for both grocers that ‘may not save either of you’.