A takeover of Asda by Sainsbury’s would hit farmers’ margins and could affect food quality and choice, according to the National Farmers’ Union.
The fears were raised in oral evidence to the CMA from the NFU’s head of food and farming Philip Hambling, Reuters reported.
Hambling said farmers were worried about whether a merged Asda and Sainsbury’s could pass savings of 10% on to shoppers without farmers being forced to shoulder the burden.
He told the CMA: “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.
“Continually squeezing margins can take away the ability of the food and farming industry to invest and improve quality, range and sustainability.”
Farmers’ concerns follow those of some other suppliers. Earlier this month one, named in documentation only as ‘supplier B’ by the CMA to preserve its anonymity, said the deal would be “extremely detrimental” to shoppers.
Sainsbury’s and Walmart-owned Asda revealed plans for a £15bn merger earlier this year. The CMA is investigating the plans and its provisional findings are expected early next year, before a final report in March.
The two giant grocers have argued that suppliers would not be squeezed as a result of a deal, which they say would benefit consumers.
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