Sainsbury's and Asda merger comes under scrutiny

Competition policy (PESTLE) & Porter Five Forces in action: yet another review of competitive rivalry in the UK supermarket industry as the planned merger between Sainsbury's and Asda is sent for investigation by the Competition and Markets Authority.

Specifically, the CMA is concerned about whether the merger will (in their words) "lead to less choice, and therefore higher prices or worse quality services, across the range of products sold by both businesses."

They are also worried by the possible increase in the monopsony (buying) power of an enlarged supermarket chain. Suppliers might see their own profit margins and commercial viability come under renewed pressure.