Sainsbury's-Asda merger blocked by regulator

The proposed merger between Sainsbury’s and Asda has been blocked by the UK’s competition watchdog.

The Competition and Markets Authority (CMA) said it should not go ahead because it would raise prices for consumers.

The CMA said it wanted to “protect the millions of people who shop at Sainsbury’s and Asda every week”.

Sainsbury’s said it would not appeal against the decision.

The supermarket’s chief executive, Mike Coupe, said: “The CMA’s conclusion that we would increase prices post-merger ignores the dynamic and highly competitive nature of the UK grocery market.

“The CMA is today effectively taking £1 billion out of customers’ pockets.”

The deal would have created the UK’s biggest supermarket chain, accounting for £1 in every £3 spent on groceries.

Sainsbury’s and Asda had also offered to sell between 125 and 150 of their supermarkets to allow the merger to proceed, along with some petrol stations and convenience stores.

But the CMA, which had previously raised concerns about the deal, said the merger would lessen competition at both a national and local level.

Stuart McIntosh, chair of the CMA’s inquiry group, said: “Following our in-depth investigation, we have found this deal would lead to increased prices, reduced quality and choice of products, or a poorer shopping experience for all of their UK shoppers.

“We have concluded that there is no effective way of addressing our concerns, other than to block the merger.”