A Sainsbury's/Asda merger will harm the rural economy

A Sainsbury's/Asda merger will harm the rural economy

Today in Parliament I asked the Under-Secretary for Business how a deal giving a future combined Sainsburys/Asda group two-fifths of the total value of the UK grocery market would help already beleaguered producers and processors.

Sadly, he was unable to provide the House with a credible answer.

The UK retail market is already cut-throat. As Mike Cherry, chairman of the Federation of Small Businesses has pointed out, under this deal a huge new business would have enhanced power to negotiate suppliers down and or worsen their payment terms.

The creation of near-monopolies rarely delivers its promised benefits.

Every such decision made, must be viewed in the light of its likely effect on wider society. Thousands of workers face job losses and communities the closure of their local supermarkets.

For the sake of the wider rural economy, the Competition and Mergers Authority (CMA) must be called in to examine the potential impact on suppliers as a matter of urgency. 

This remains very far from a "done deal."

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