Sainsbury's merger with Asda could lead to a worse experience for consumers in-store and online, higher prices and a reduction in choice and quality, the UK's competition and consumer authority has warned.
The Competition and Markets Authority also has concerns that prices could rise at a large number of Sainsbury’s and Asda petrol stations.
The CMA said its findings could result in the deal being blocked or the requirement that Asda and Sainsbury's sell off a significant number of stores and other assets – which could potentially include one of the Sainsbury’s or Asda brands.
The supermarket giants said they would continue to press their case for the merger and said the findings "fundamentally misunderstand how people shop in the UK today".
In a joint statement, Sainsbury's and Asda said: "Combining Sainsbury’s and Asda would create significant cost savings, which would allow us to lower prices. Despite the savings being independently reviewed by two separate industry specialists, the CMA has chosen to discount them as benefits.
"We are surprised that the CMA would choose to reject the opportunity to put money directly into customers’ pockets, particularly at this time of economic uncertainty."
