Asda-Sainsbury’s merger ‘should face competition probe’

Opposition politicians have called for the merger between Asda and Sainsbury to be investigated by the competition watchdog amid fears customers could be left worse off.

Liberal Democrat leader Sir Vince Cable, a former business secretary, and Labour’s Rebecca Long-Bailey, shadow business secretary, have said the Competition and Markets Authority (CMA) should look into the £10bn deal, which would create the UK’s largest supermarket chain.

Talks are said to be in an “advanced” stage and, if the merger does go through, “it will be the biggest shake up in UK grocery retailing since Morrisons took over Safeway in 2004”, says the BBC’s business correspondent Emma Simpson.

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The combined group would have 2,800 stores, representing 31.4% of the UK grocery market - slightly more than that of market leader Tesco.

Speaking to the BBC, Cable said the CMA should force the companies to sell off stores to avoid the new business becoming too dominant in a particular area, and warned the merger risked creating “even more concentrated local monopolies”.

His concerns were echoed by Long-Bailey who warned the merger risked “squeezing what little competition there is in the groceries market even further”.

News of the potential deal also caused concern among workers’ unions, with fears the tie-up could lead to store closures and thousands of lay-offs.

The CMA can launch an inquiry only once an intention to merge has been formally unveiled, with an announcement expected later today.

Despite calls for scrutiny, “some expect the deal could be approved by the CMA after the watchdog waved through Tesco’s £3.7bn swoop for wholesaler Booker, creating the UK's largest grocery wholesaler”, reports The Daily Telegraph.