CMA Criticised Over Handling of Proposed Sainsbury's - ASDA Merger

The Competition and Markets Authority (CMA) has been criticised by judges over its handling of the proposed Sainsbury's-ASDA merger.

Lord Justice Roth and two other judges have said the CMA had made 'unreasonable and unfair' demands of the supermarket chains, expecting them to respond to 400 pages of complex market analysis in just seven working days.

The grocers launched a judicial review after the CMA refused their application for an 11-day extension so that they could respond to the material provided to them. 

It now looks as though the CMA has extended its investigation into the £12bn merger proposal, as the Competition Appeal Tribunal showed that the CMA is planning to publish its final report and decision by 30th April, eight weeks after the original deadline of 5th March.

Sainsbury's and Asda said: 'We took the decision to apply for a Judicial Review of the CMA's phase two timetable and process reluctantly but were pleased that the Tribunal ruled in our favour.'

A CMA spokesman said it is 'not unusual for companies to be required to respond in the timelines we were working to with Sainsbury's and Asda'.

'The court confirmed that it is for the CMA to set its own administrative timetable, in order to meet the legally binding deadline, and that we did not need to give them as much time as they were asking for.'

The judges expressed concern over the CMA's ability to respond to future mergers, given that the Sainsbury's-ASDA proposal is over five times the size of the average merger, stating: 'If the departure of the UK from the EU will lead to all large-scale, international mergers affecting the UK which currently fall within the exclusive jurisdiction of the EU Commission, being in future also subject to the UK merger regime, this problem is likely to be multiplied.'

A Sainsbury’s and Asda spokesperson said: “We continue to work constructively with the CMA. We are confident that bringing our two businesses together will be good for customers and increase competition in the UK grocery market.”

Source : Insight DIY Team

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