Asda and Sainsbury’s chief executives will be brought before MPs on 20 June to answer questions on how the proposed landmark merger between the two supermarkets will impact British farmers, other suppliers and consumers.
Sainsbury’s Mike Coupe and Asda’s Roger Burnley will be quizzed by the Environment, Food and Rural Affairs Committee (EFRA), which is particularly concerned about the ramifications for suppliers.
The melding of the UK’s number two and three supermarkets, unveiled in April, will create a supermarket titan bigger than Tesco with revenues of £51billion, a network of 2,800 stores and 330,000 employees.
Sainsbury’s chief executive Mike Coupe (left) is said to have masterminded the deal with Asda, which is helmed by Roger Burnley (right). Both will be questioned by MP’s later this month
MP Neil Parish, chair of the committee, dubbed the tie-up ‘ the biggest potential shake-up of the grocery market in recent years’.
He said that members of the EFRA are ‘cautious’ about the plans as ‘grocery retailers do not have a great record of treating their suppliers well’.
When the lid was lifted on the deal, Coupe pledged to cut prices on everyday products for shoppers by around 10 per cent.
But, as the tie-up gives the merged company increased buying power, there are fears that suppliers could get squeezed as a result.
The supermarkets claimed previously that only large suppliers will be impacted.
Both Parish and the chairs of the Business committee have written to the Competition and Markets Authority (CMA), which kicked off its own investigation into the deal in May.
They are urging the competition watchdog to consider issues of ‘market dominance’.
The CMA’s probe is currently in the ‘pre-notification’ phase, which entails gathering information before a formal inquiry can begin.
‘The cost savings being promised through this merger must not come through squeezing those further down the supply chain,’ Parish argued.
‘I am also concerned that with two supermarkets taking up around 60 per cent of the market, suppliers would be more reluctant to raise complaints about unfair practices.’
Coupe insists that the merger will bring benefits in terms of cost savings for shoppers and will hurt only the largest suppliers
A Sainsbury’s spokeswoman said: ‘Combining Sainsbury’s and Asda would mean lower prices and a reduced cost of living for customers across the UK, while contributing even more to the nation’s economy.
‘We are proud of our track record of helping suppliers to grow their businesses and believe the proposal would create new opportunities for small and large suppliers alike.
‘We look forward to explaining these and other benefits in more detail before the EFRA Select Committee.’
On the day the deal was announced, Coupe was caught on camera singing We’re in the Money, for which he later apologised.