Sainsbury's-Asda merger blocked by regulator | Progresiv
The proposed merger between Sainsbury's and Asda has been blocked by the UK's competition watchdog over fears it would raise prices for consumers. 
The Competition and Markets Authority (CMA) also said it would raise prices at the supermarkets' petrol stations and lead to longer checkout queues.
Sainsbury's boss Mike Coupe said the regulator was "effectively taking 1 billion pounds out of customers' pockets". But he said the supermarkets had agreed to end the deal.
Asda boss Roger Burnley said he was disappointed: "We were right to explore the potential merger with Sainsbury's, which would have delivered great benefits for customers and supported the long term, sustainable success of our business."
The deal would have created the UK's biggest supermarket chain, accounting for 1 pound in every 3 pounds spent on groceries.
Sainsbury's and Asda had said the planned tie-up would have cut their costs, allowing them to lower prices for consumers across the UK.
Analysts also believed it was designed to help the two supermarkets counter the rise of discounters Aldi and Lidl in the increasingly competitive grocery market.
But the CMA, which had previously raised concerns about the deal, said the merger would lessen competition at both a national and local level.
Sainsbury's has more than 1,400 shops in the UK, of which about 800 are convenience stores, while Asda has more than 600.
Stuart McIntosh, chair of the CMA's inquiry group, told the BBC's Today programme: "It would reduce competition in supermarkets and online grocery shopping and at the companies' petrol stations.
"We think that is likely to lead to higher prices or other changes which would be unwelcome to shoppers, such as longer checkout queues."
Earlier this year, Sainsbury's and Asda, which is owned by US retail giant Walmart, promised to sell between 125 and 150 of their supermarkets to allow the merger to proceed, along with some petrol stations and convenience stores.
They also pledged to bring in 1 billion pounds of price cuts for consumers if the deal went ahead, and be held to this by an independent guarantor.
Sainsbury's said the CMA had ignored this offer, and misunderstood the potential impact on competition.
But the CMA said it had conducted surveys of 60,000 of the supermarkets' customers.
"Those promises were based on cost savings which we don't think are likely to be realised. Also those price promises are very likely to be difficult to track in practice," Mr McIntosh said. (www.bbc.com)
