Committee chairs tell CMA: Include suppliers in Sainsbury’s Asda probe

Two select committee chairs have joined forces to ask the competition watchdog to include suppliers in any probe of the Sainsbury's Asda merger.

Neil Parish, the Conservative chair of the Environment, Food and Rural Affairs (EFRA) Committee, told City A.M. that he and Labour MP Rachel Reeves will ask the Competition and Markets Authority (CMA) to take evidence from suppliers.

Reeves is chair of the Business Energy and Industrial Strategy (BEIS) Committee.

The MP said that there were fears suppliers would be left worse off if the merger reduced competition.

He said: "Mike Coupe has said that the merger would deliver at least £500m in cost savings, partly through better deals with suppliers. We will need to monitor carefully what exactly that will mean for suppliers, many of whom are already operating on tight margins."

His comments came after the EFRA committee met this morning to hear evidence from the Groceries Code Adjudicator Christine Tacon CBE and farming minister George Eustice.

Read more: Sainsbury's growth falls behind big rivals as Tesco's march continues

Committee members raised concerns that the combination of two major players could make it more difficult for suppliers to complain about retailers to the adjudicator if most of their business relied on a smaller number of customers.

But Tacon said she had "no concerns at all" about the size of supermarkets, as she still has the power to regulate them.

Eustice told the committee that the CMA would have the opportunity to consider supply chain issues as well as consumer concerns.

However, any investigation will "predominantly" look at consumer perspectives, he said.

Meanwhile, Liberal Democrat leader Sir Vince Cable has said that the CMA should prevent Sainsbury's from opening Argos outlets inside Asda stores.

Sainsbury's chief executive Mike Coupe said on Monday that opening Argos stores inside Asda sites was one option for integration between the two supermarkets.

Read more: How would a potential merger affect Asda and Sainsburys?

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