The CMA has officially launched a probe into the Sainsbury's Asda merger

Alys Key
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The combination will create the biggest supermarket in the UK (Source: Getty)

The competition watchdog has officially launched an investigation into the proposed mega-merger between supermarkets Sainsbury's and Asda.

Pricing, quality and the range of products at both businesses will come under scrutiny as the competition and markets authority (CMA) tries to determine if a tie-up will have a negative effect for UK consumers.

The regulator will also investigate the possible impact on suppliers, who could be squeezed by the combined buying power of the two supermarkets, and whether this could result in less innovation.

The investigation has been widely expected after the CMA confirmed following the announcement in May that it would look into the deal.

Andrea Coscelli, chief executive of the CMA, said today: “About £190bn is spent each year on food and groceries in the UK so it’s vital to find out if the millions of people who shop in supermarkets could lose out as a result of this deal.

“We will carry out a thorough investigation to find out if this merger could lead to higher prices or a worse quality of service for shoppers and will not allow it to go ahead unless any concerns we find are fully dealt with.”

Sainsbury's and Asda have requested that the investigation takes place on a fast-track basis, which will see it move to phase 2, an in-depth probe, faster than most cases.

Following an initial invitation to comment, anyone wishing to raise possible competition issues has until the end of the month to do so.

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