NFU head of food and farming Philip Hambling told the Competition and Markets Authority that farmers could “take the brunt” of the Sainsbury’s-Asda merger.
Giving oral evidence, Hambling said that farmers were concerned the promised 10 per cent savings touted by Sainsbury’s would come in part from greater reduction in farmgate prices.
In September the CMA announced they would be launching a second phase of their investigation into the merger, saying there was a “realistic prospect of a significant lessening of competition” in 463 locations where the retailers’ catchment areas overlap.
Hambling told the CMA: “The consolidation of retail buying power is one of the biggest concerns farmers and growers have about the proposed merger. As the foundation of the UK’s largest manufacturing sector food and drink, there are serious fears that farm businesses will be the ones to take any additional price pressure.
“At a time when farms are already facing intense price pressure, the prospect of a further squeeze on price leaves farmers concerned about the potential impacts on their businesses.
“The NFU has concerns that this merger’s desire to reduce prices even further could leave farmers as the ones to take the brunt of significant market disruption as a result. We believe this would impact farm businesses’ ability to supply at ever lower prices.”
In a joint statement following Asda and Sainsbury's response to the CMA Phase Two a spokesperson reiterated that “customers will be the big winners from the combination”.
'By bringing our two businesses together, we will be able to invest further in range, quality and customer service, while lowering prices and reducing the cost of living for millions of UK households.”
