J Sainsbury takeover of Asda could face parliamentary inquiry amid concerns for UK farmers - report
20 MAY 2018
J Sainsbury’s [LON:SBRY] agreed GBP 7.3bn (USD 9.83bn) takeover of UK supermarket rival Asda could face a parliamentary inquiry as well as a previously announced investigation by the UK’s Competition and Markets Authority (CMA), The Mail on Sunday reported.
The newspaper cited one parliamentary source who noted concerns that a new “duopoly” will “crush” farming in the UK, adding that farmers are unable to cut production costs further.
The merged group will be bigger than Tesco, which is currently the biggest supermarket group in the UK.
Members of parliament (MPs) are concerned that CA will not fully consider how the proposed merger will affect small suppliers, the report said.
The chairman of the Commons food and rural affairs committee, Neil Parish, has already held private hearings about the merger and is thinking about beginning a full select committee inquiry, according to the newspaper.
Parish said farmers are “nervous,” adding that he is “suspicious” and wants reassurance.
It is understood that business minister Andrew Griffiths has been asked to appear in front of the food and rural affairs committee in preliminary hearings, the report continued.
As reported, business secretary Greg Clark has asked the CMA to consider the merger’s potential impact on suppliers.
The report quoted J Sainsbury, which said on Saturday evening, 19 May that it strongly believes the merger will be of benefit to both suppliers and customers. Asda noted its long-term associations with its suppliers.
Asda is a subsidiary of the Bentonville, Arkansas-based general retailer Walmart Inc