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English Español Sainsbury's and Asda commit to fuel cap after merging

Sainsbury's will cap its fuel gross profit margin to no more than 3.5 pence per litre for five years; Asda will guarantee its existing fuel pricing strategy.

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Author: PetrolPlaza Correspondent Pablo Plaza

J Sainsbury plc (Sainsbury's) and Asda Group Limited (Asda) have recently submitted to the Competition and Markets Authority (CMA) their responses to the CMA's Provisional Findings and Notice of Proposed Remedies.

In their detailed response to the Provisional Findings, Sainsbury's and Asda have sought to address what they consider economic and legal errors regarding the threshold for identifying competition problems.

Sainsbury's and Asda have also responded to the Notice of Proposed Remedies by outlining supermarket and petrol forecourt divestments across both brands that would satisfy reasonable concerns regarding any substantial lessening of competition as a result of the merger by applying a conservative yet reasonable threshold.

The two businesses argue that the merge will lower prices for customers in an increasingly competitive market, while improving quality and service. The price commitments will be independently reviewed by a third party and the Parties will publish the performance each year, holding them to public account

"We are trying to bring our businesses together so that we can help millions of customers make significant savings on their shopping and their fuel costs, two of their biggest regular outgoings. We have proposed a reasonable yet conservative remedy package and hope the CMA considers this so that we can deliver the cost savings for customers", said Sainsbury's Chief Executive, Mike Coupe and Asda Chief Executive, Roger Burnley.
The CMA is expected to publish Sainsbury's and Asda's responses to the Provisional Findings and Notice of Possible Remedies in due course. Final Report is expected by 30th April.

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