Asda-Sainsbury's merger to put squeeze on suppliers warn MPs

MPs from two parliamentary committees have called on a competition regulator to examine the merger's effect on suppliers.
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MPs are calling the competition regulator to investigate if the merger of the two supermarket chains could negatively affect retailers.

With each brand holding around 30 per cent of the market, the combined business would now control 60 per cent of the total grocery market.

“The cost savings being promised through this merger must not come through squeezing those further down the supply chain,” warned Conservative MP Neil Parish, chair of the environment food and rural affairs committee.

Rachel Reeves, Labour MP and chair of the business energy and industrial strategy committee, also called on the Competition and Markets Authority (CMA) to look at how suppliers would be affected.

“This merger threatens customer choice, hands yet more power to mighty supermarket players and heaps more pressure on small and medium suppliers. The CMA needs to be a champion of consumers and it must look closely at the impact of this merger on the supply chain as well as the effect on competition in the supermarket sector.”

MPs wrote the letter after questioning the farming minister, George Eustice, and the grocery code adjudicator Christine Tacon, who regulates supermarkets’ relationships with direct suppliers, in parliament on Wednesday.

Eustice said it was up to the CMA to “methodically” examine the implications of the merger for consumers and the wider market and take any action necessary. He added that it was “open to the CMA to consider the impact on the market as well”.

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