Green MEP calls on EU to block Sainsbury's and Asda merger

The MEP said the  merger would work against the interest of food producers and farmers
The MEP said the merger would work against the interest of food producers and farmers

A Green MEP is calling on the European Union to block the proposed Sainsbury's and Asda merger, saying it would work against the interest of food producers.

The merger would create the UK's largest retailer with a market share of over 30%, out-stripping rival Tesco.

Green MEP Molly Scott Cato, who is economy and finance speaker for the Green Party, says the merger would work against the interest of consumers, food producers and small businesses by concentrating power and having a negative impact on competition.

Molly Scott Cato said the UK’s food retail market is on a "conveyor belt towards increased concentration and reduced competition".



She said she hopes the EU Competition Commission will check the proposed merger, and force Sainsbury’s and Asda to shelve their plans.

'Eliminate competition'



“It cannot be right for just two retailers to hold almost 60% of the market. This cannot be in the interests of UK consumers or food producers,” Ms Scott Cato explained.

“We know that the larger these companies become, the more ruthless they are in seeking to eliminate competition and pressure producers, leaving them struggling to remain viable.

“The EU has taken a lead in challenging unfair practices in the food supply chain so I hope that the Competition Commissioner will conclude that the concentration of power into the hands of a small group of titans leads to unfair contracting practices with farmers and food suppliers.

She added: “The fact that the UK imports a large percentage of its food from the EU should also focus minds at the Commission because such a merger could have far reaching implications for European suppliers.”

'Mega-mergers'

The Green MEP said if the UK does not show itself willing to block "mega-mergers", farmers, food producers and small independent retailers will be worried about what sort of business and economic environment they face post-Brexit.

Molly Scott Cato has also written to the Chair of the UK’s Competition and Markets Authority to highlight concerns about the proposed merger.



The UK’s competition watchdog has announced it is likely to investigate the proposed merger.