The UK competition and markets authority (CMA) has blocked the proposed merger between UK supermarket giants Sainsbury’s and Asda, stating that the merger would lead to higher prices for UK shoppers. “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,” said Stuart McIntosh, chair of CMA.

The specific reason for wanting to merge was to lower prices for customers

Following the CMA’s ruling, Sainsbury’s and Asda both announced they had mutually agreed to terminate the proposed merger. In a statement, Sainsbury’s chief executive Mike Coupe rejected the CMA’s findings that the merger with Asda would have led to higher prices for UK consumers.

“The specific reason for wanting to merge was to lower prices for customers. 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 today, is effectively taking £1bn out of customers’ pockets,” said Coupe.

Sainsbury’s and Asda, the second and third largest supermarkets in the UK, first proposed the £7.3bn (€8.5bn) merger last year. The new entity would have become the largest supermarket in the UK with a combined 31% share of the £185bn (€210bn) UK grocery market.

Sainsbury’s and Asda had offered to sell as many as 150 stores as part of the merger, yet it failed to address the CMA’s concerns.