Petrol retailers take aim at Sainsbury’s and Asda after fuel cap pledge

As two of Britain’s largest supermarket chains continue with their bid to merge, independent retailers are up in arms about their latest pledge.

The proposed measures to save the merger between Sainsbury’s and Asda will put thousands of interdependent fuel retailers out of business, according to the British Petrol Retailers Association (PRA).

As part of their responses to the Competition and Markets Authority (CMA) regarding the merger, Sainsbury promised to cap its fuel gross profit margin to no more than 3.5 pence per litre for five years, while Asda guaranteed its existing fuel pricing strategy.

The PRA believes these measures could lead to job losses and closures across Britain’s network of independent fuel retailers.

“The proposed measures to save the struggling merger between Sainsbury’s and Asda will put thousands of independent petrol retailers out of business and decimate consumer choice across the UK, particularly in rural areas,”said Brian Madderson, Chairman of the PRA.

The association highlights the capacity by supermarkets to offer cheaper prices as they can balance the earnings with other business areas that are not accessible to independent fuel retailers.

Since 2000, nearly 70% of independent fuel retailers have been forced to close; a fact that coincides with the rapid growth of supermarkets and their entry into the fuel market, according to the PRA.

“This latest attempt by Sainsbury’s and Asda to keep their merger afloat will lead to the closure of hundreds of often small, family-run businesses providing essential services to hard-pressed rural communities,” added Madderson.

The news comes after the grocers offered to divest between 125 and 150 supermarkets in an effort to assuage the CMA.