Asda and Sainsbury’s bosses to face committee hearing

13-Jun-2018 - Last updated on 13-Jun-2018 at 10:26 GMT

Asda and Sainsbury's had combined annualised sales of £51bn in 2017

Supermarket bosses have been summoned to a hearing on the impact of the proposed mega merger between Asda and Sainsbury’s.

The Environment, Food and Rural Affairs (EFRA) Committee will hold a one-off evidence session on Wednesday 20 June, focused on the proposed merger and its impact on suppliers.

It has called Asda chief executive Roger Burnley and Sainsbury’s chief executive Mike Coupe to answer questions

News of the merger broke in April when it was revealed the two retailers planned to create an entity with annualised sales of £51bn in 2017 and a combined store footprint of 2,800 sites.

Supplier job loss fears

Independent analysts have raised concern about the impact on suppliers. In May, think-tank New Economics Foundation said the move could result in the loss of 2,500 supplier jobs.

Neil Parish MP, chair of the EFRA Committee, said: “Grocery retailers do not have a great record of treating their suppliers well, and some of them [suppliers] are cautious about the proposed Sainsbury’s and Asda merger.

“My Committee is holding this session to investigate how the biggest potential shake-up of the grocery market in recent years could affect British farmers and suppliers, as well as consumers.”

An Asda spokesperson said: “The proposed merger offers significant benefits to suppliers and customers. Although we expect the Competition and Markets Authority examination of the merger to take around 18 months to complete, we look forward to explaining the clear benefits to the Committee.”

‘A reduced cost of living’

A Sainsbury’s spokesperson 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.”

The Committee will also hear from Chris Brown, sustainable business director at Asda and Judith Batchelar, director of Sainsbury’s brand at Sainsbury’s.

Last month, a leading City analyst claimed the proposed merger would create a “duopoly” that will seriously harm the interests of manufacturers and consumers.

The deal was “not in the national interest”, Shore Capital head of research Clive Black claimed.