Lidl and Aldi could be forced to reveal details of the inner workings of their growing empires as part of the investigation into Sainsbury’s merger with Asda.
Pressure is mounting on the German discounters to reveal precise details of sales at individual stores, company structures and the amount of tax paid in UK as they continue to eat into the market share of the Big Four supermarkets.
The growth of the budget supermarket chains, which account for more than one in eight sales, were one of the key motivators for Sainsbury’s bid to take over Asda.
Company secrets: Pressure is mounting on Lidl and Aldi to reveal details of sales at individual stores, company structures and tax paid in UK
Now it has emerged that the German firms could be forced to divulge financial information never revealed before when the competition watchdog probes the £14.1billion tie-up between Sainsbury’s and Asda.
Aldi and Lidl have seen huge growth during the past decade and their discount model has been responsible for driving down prices at giants such as Tesco – which previously had been able to use its market share to dictate terms.
Over the past five years, the Big Four – Tesco, Sainsbury’s Asda and Morrisons – have seen their market share slashed from 76.3 per cent to 70 per cent.
About two in every three households shopped with at least one of the German discount chains in the 12 weeks to March, according to the latest data.
Last year Lidl revealed a £1.5billion expansion plan which will see it open 60 shops a year, while Aldi wants to open stores in every town and city in the UK.
For Asda and Sainsbury’s to get the green light to merge from the Competition and Markets Authority (CMA), they may be forced to close or sell stores in areas where it could hurt competition, potentially pushing up prices for customers.
The number of stores they will have to give up depends on whether the CMA considers Lidl and Aldi as competitors or only factor in so-called ‘Big Four’ rivals Tesco and Morrisons.
If Lidl and Aldi are deemed to be competitors, the CMA could use its powers to demand more financial details.
Lidl has never revealed how much tax it pays in the UK. Aldi is generally considered to be the more transparent of the two and paid £49.3million in tax on profits of £214.7million in 2016 – its latest accounts available.
It is understood both Aldi and Lidl are willing to co-operate with the CMA.
Neither Lidl, Aldi, Sainsbury’s nor Asda wanted to comment.