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PRA pleased with CMA

The PRA has welcomed the decision by the Competition and Markets Authority (CMA) to block the merger between supermarket giants Sainsbury's and Asda, after finding it would lead to increased prices at many petrol stations across the UK.

PRA chairman Brian Madderson had warned last month that the proposed measures to save the struggling merger would put thousands of independent petrol retailers out of business and decimate consumer choice across the UK, particularly in rural areas. He made representations to the CMA regarding Sainsbury's proposal to cap retail fuel margins for a period of five years in a late attempt to win over the regulator.

Madderson said: "This move would have been inconsistent with the CMA's policy of seeking structural changes as opposed to behavioural changes. With hundreds of Sainsbury's filling stations across the UK, it would have proved very costly and difficult to enforce a margin cap in a way that was properly transparent.

"We believe Sainsbury's proposed solution could have caused long-term damage to the UK's fragile refuelling network."

Stuart McIntosh, chair of the CMA inquiry group, said: "It's our responsibility to protect the millions of people who shop at Sainsbury's and Asda every week. Following our in-depth investigation, we have found this deal would lead to increased prices, reduced quality and choice of products, or a poorer shopping experience."

The CMA's investigation found that it would lead to motorists paying more at over 125 locations where Sainsbury's and Asda petrol stations are located close together.