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Sainsbury's and Asda merge could lead to higher prices and lower quality

PUBLISHED: 08:54 20 February 2019 | UPDATED: 08:54 20 February 2019

The Competition and Markets Authority (CMA) has provisionally found evidence that a merger of Sainsburys and Asda would result in prices being pushed up and quality being reduced.

The Competition and Markets Authority (CMA) has provisionally found evidence that a merger of Sainsburys and Asda would result in prices being pushed up and quality being reduced.

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The Competition and Markets Authority (CMA) has provisionally found evidence that a merger of Sainsbury's and Asda would result in prices being pushed up and quality being reduced.

The CMA has found that the proposed deal could lead to a worse experience for in-store and online shoppers across the UK through higher prices, a poorer shopping experience, and reductions in the range and quality of products offered.

It also has concerns that prices could rise at a large number of Sainsbury’s and Asda petrol stations.

The news would potentially block the merge.

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Where the areas of overlap are have not been confirmed by the CMA, and would not confirm whether any of these areas were in Norfolk or Suffolk.

As well as concerns for people shopping in their stores, the CMA is concerned the merger could drive up prices and reduce the quality of service for online customers.

It also believes the deal could lead to inflated fuel costs at more than 100 locations where Sainsbury’s and Asda petrol stations overlap.

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.

“These are our provisional findings, however, and the companies and others now have the opportunity to respond to the analysis we’ve set out today.

“It’s our responsibility to carry out a thorough assessment of the deal to make sure that the sector remains competitive and shoppers don’t lose out.”

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Mike Coupe, the chief executive of Sainsbury’s, said: “In the end they are taking money out of customers’ pockets.

“As UK plc with Brexit looming, and a completely unpredictable set of competition rules, who would invest in this country? This is just outrageous.”

Sainsbury’s shares slid this morning by 14% following the news.

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