THE competition watchdog's decision to block the £12 billion merger of Sainsbury's and Asda has been welcomed in Northern Ireland.
In its final report into the deal, the Competition and Markets Authority (CMA) found that the tie-up would lead to increased prices in stores, online and at petrol stations across the UK.
Shoppers and motorists would be "worse off" if Sainsbury's and Walmart-owned Asda were to merge, the CMA said, adding that it would lead to price rises, reductions in the quality and range of products or a poorer overall retail experience.
The watchdog claimed that the deal would have resulted in a "substantial lessening of competition" at both a national and local level for people shopping in supermarkets.
Stuart McIntosh, chairman of the CMA inquiry group, said: "It's our responsibility to protect the millions of people who shop at Sainsbury's and Asda every week.
"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.
"We have concluded that there is no effective way of addressing our concerns, other than to block the merger."
Sainsbury's boss Mike Coupe said that the decision effectively takes £1bn out of customers' pockets.
"The specific reason for wanting to merge was to lower prices for customers," Mr Coupe said.
"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 is today effectively taking £1 billion out of customers' pockets."
Roger Burnley, the Asda boss, said that he is "disappointed" in the CMA's decision.
A merger between the duo, the UK's number two and three supermarkets, would have created a supermarket titan bigger than Tesco with revenues of £51bn and a network of 2,800 Sainsbury's, Asda and Argos stores.
Sainsbury's, Walmart and Asda have now mutually agreed to terminate the transaction.
Ulster Farmers Union president, Ivor Ferguson said the decision from CMA had not come as a surprise.
"Its findings highlight the impact that the proposed merger could have had on the entire food supply chain and for us the key concern has always been on the potential impact it could have on our members," he said.
“It has always been our view that we, the primary producer would most likely have been hit with pressure on prices being paid for our high-quality products, due to the increased pricing power of this merger. This would have been completely unacceptable, given that margins are already tight on many farm businesses.”
Retail NI chief executive, Glyn Roberts believes the CMA made the right decision to block the merger.
"From a competition, consumer and supplier perspective, this proposed merger would have been a bad deal," he said.
“Many local suppliers to the grocery sector were extremely concerned that this merger would result in a significant reduction in trade."
It is understood that Walmart will continue to look to sell Asda to another buyer following the CMA's ruling.
