CMA urged to broaden scope of Sainsbury-Asda deal

Politicians on Wednesday urged the competition watchdog to widen its scope into the Sainsbury’s and Asda investigation to ensure suppliers are treated fairly.

“The Competition and Authority Market will predominantly look at it from a consumer interest point of view but I am aware that it can consider the impact on the wider supply chain to make sure there is a dynamic, competitive market, with sufficient options,” said George Eustice, the food and farming minister, during a grilling in parliament about the deal.

There have been concerns over the 10% price cut in everyday items promised by the top brass of the enlarged business, soon to be Britain’s biggest supermarket, that it could hurt suppliers and producers. David Simpson MP asked: “Who pays for that, where is that 10% coming from?” But Christine Tacon, who heads the Groceries Code Adjudicator (GCA), fell short of reassuring suppliers that the merger won’t affect them.

“If they have to agree to [set] prices [which then they] can’t continue with, that’s part of your negotiation and it isn’t something I can interfere with,” she said at the hearing.

Separately, Liberal Democrat leader Vince Cable called for the CMA to block the expansion of Argos, owned by Sainsbury’s, inside Asda’s stores. “This tie-up is a competition threat beyond just the groceries market,” he said. He added that the CMA should use its powers to at least demand “some sort of divestment of Argos’ operations.”

There are now 191 Argos stores in Sainsbury’s supermarkets, with plans to get to 250 by March 2019. Sainsbury’s boss Mike Coupe said he intents to match that number in Asda stores.