Sainsbury’s & Asda seek extra time from CMA investigation

Sainsbury’s and Asda hope to take the Competition and Markets Authority to a judicial review.

The supermarkets, which are planning on carrying out a merger, have been referred for an in-depth investigation by the watchdog.

The second and third-biggest supermarkets have said that the investigation, which is due to be completed by the end of March, “does not give the parties or the CMA sufficient time to provide and consider all the evidence given the unprecedented scale and complexity of the case”.

“Specifically, we have asked the CMA for an additional 11 working days over the Christmas period to respond to a large amount of material recently provided to us,” said Sainsbury’s.

Shares in the group fell 4% on Wednesday.

Responding to the request from the supermarkets, the CMA said in a statement:

“Our first priority in this investigation has, and will continue to be, assessing if shoppers would face higher prices or a lower quality of service as a result of the merger and, if so, to prevent that from happening.”

“We began to engage with the companies involved as soon as they announced their intention to merge at the end of April, to make sure they had the opportunity to fully put forward their views. Investigating any merger of this size requires assessing a large volume of material in a short timeframe, and it is not unusual for the companies involved to do this in the timelines we have been working to with Sainsbury’s and Asda. We have done everything we can to aid their consideration of this work, whilst still ensuring we are able to meet our legally-binding deadline. This includes extending certain administration timelines where appropriate.”

“If we gave the companies the extra time they are now asking for, it would put our ability to complete the investigation by the required deadline at very serious risk. As with all of our merger reviews, we construct our timetable to ensure that everyone has the chance to have their say, including customers, the companies involved and suppliers.”

If the deal between Sainsbury’s and Asda is completed, the combined group will overtake Tesco as the UK’s biggest supermarket.

Shares in Sainsbury’s (LON: SBRY) are trading down 4.86%