Asda and Sainsbury's CEOs to face MPs over merger

Sainsbury's chief executive Mike Coupe and Asda boss Roger Burnley will face questions from MPs about Sainsbury's proposed £7.3bn takeover of its Walmart-owned rival.

Coupe and Burnley will be appear at the environment, food and rural affairs committee on 20 June to answer questions about the reasons for the merger and its impact. They will be joined by Judith Batchelar, Sainsbury's director of brand, and Chris Brown, Asda's sustainable business director.

The CEOs' appearance will increase political scrutiny of a deal that has been criticised by unions and campaigners. Neil Parish, the committee's Conservative chair, has said he is worried about the takeover's effect on customer choice and small and medium suppliers.

Parish and Rachel Reeves, who chairs the business committee, wrote to the Competition and Markets Authority on 3 May expressing concern about the deal, which would give Sainsbury's about 31% of the UK grocery market. The combined market share for Sainsbury's and Tesco, currently Britain's biggest food retailer, would be almost 60%.

Announcing the session with Coupe and Burnley, Parish said: “My committee is holding this session to investigate how the biggest potential shake-up of the grocery market in recent years could affect British farmers and suppliers, as well as consumers. Grocery retailers do not have a great record of treating their suppliers well, and some of them are cautious about the proposed Sainsbury’s and Asda merger."

Coupe has said consumers will benefit from the merger because the combined group will cut prices. But the New Economics Foundation thinktank has said if price reductions are passed on to suppliers those businesses will be forced to cut 2,500 jobs with further job losses likely further down the supply chain.