The proposed merger of Sainsbury’s and Asda could lead to increased pressure on farmers and reduce the choice and innovation of products available for the shopper. This is according to the NFU, who told the Competition and Markets Authority (CMA) the farming industry’s concerns on the possible creation of the country’s largest retailer.
In giving oral evidence, NFU head of food and farming Philip Hambling said that farmers are concerned whether the company can deliver its proposed 10% saving for shoppers without passing this additional pressure on to farmers.
There remains big questions around where the savings are coming from and who is paying the difference. A report released earlier this year highlights how suppliers will bear 70 percent of the brunt of the merger’s “efficiencies”.
Mr 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.
The NFU has concerns that this merger’s desire to reduce prices could leave farmers as the ones to take the brunt of significant market disruption as a result.
