The supermarket giant Tesco has said that the proposed merger of Sainsbury’s and Asda should not go ahead unless ‘extensive remedies’ are provided as a result of the move.
The remarks from Tesco were made during a hearing with the Competition and Markets Authority (CMA) which is investigating the proposed combination of Asda and Sainsburys, announced back in April this year.
The supermarket giants intend to join forces in a £12 billion transaction that would create Britain’s biggest grocer and they claim that the merger can create at least £500 million of synergies that would result in lower prices, together with a more flexible way to shop.
Back in September the CMA warned that the merger posed a substantial risk to competition in 463 local stores.
Tesco pushed through its own merger with the wholesaling business Booker last and year but said that the merger of Sainsbury’s and Asda would reduce the big four grocers to three and ‘would not be approved without extensive remedies under existing precedent.’
The CMA has reported that Tesco had said that ‘the proposed merger is a challenge in terms of economics as there are few direct customer benefits.’ Whilst Sainsbury’s and Asda have argued that the rise of Lidl and Aldi has fundamentally changed the grocery sector and cost them sales. Furthermore they claim it is imperative for them to face future challenges such as the growth of Amazon food retailing.