Andy Brian reacts to CMA’s Asda-Sainsbury’s decision in the Yorkshire Post
Friday 26th April 2019
Andy Brian, partner at Gordons and a head of retail, has been quoted in the Yorkshire Post with his thought on the decision by the Competition and Markets Authority’s (CMA’s) to block the merger between Asda and Sainsbury’s.
The Competition and Markets Authority (CMA) has blocked the proposed merger between two of the UK’s ‘big four’ supermarkets, Asda and Sainsbury’s, over fears that it would drive prices up for consumers. The decision also means good news for employees and suppliers, who faced the threat of job cuts and prices squeezes.
Reacting to the decision, Andy Brian said:
“The CMA decision was inevitable from the moment the proposed deal was announced.
“Despite all the noise about the shifting structure of the grocery market and shopper habits, and the proposed benefits to the consumer of the economies of scale, the simple fact is that this deal would have led to one business holding a huge combined share of the grocery market – and the regulator was never going to allow that.
“It is highly likely that the deal would have resulted in store closures, the cessation of operations at various distribution centres, and therefore multiple job losses. It is also probable that some central functions would have been merged and that some of those functions would therefore have been taken out of Leeds.
“A stated objective of the deal was to drive lower prices from suppliers. Asda has plenty of local suppliers whose owners will have feared that the forthcoming squeeze would put their business, and therefore even more jobs, at risk.”
Mark Jones, partner and head of food and drink at Gordons, was also quoted in the press reacting to the CMA’s decision. View his comments here.