1. ITV Report

'Squeeze on Welsh farmers' if supermarkets merge

Asda and Sainsbury say their customers will fill their bags more cheaply after the two supermarket chains merge. Credit: PA

The Welsh Government plans to raise concerns about the impact on farmers of the proposed merger between the Asda and Sainsbury supermarket chains with the Competition Commission.

A cabinet minister made the commitment after Plaid Cymru AM Simon Thomas said Welsh farmers face being squeezed by what he called "anti-competitive market forces".

We have this proposal of the Asda-Sainsbury's merger telling us that this will be done with lower prices, no jobs will be lost from the shops, no shops will close but somehow we'll have at least 10% lower prices. Now there's only one way to squeeze out lower prices in those circumstances and it's from the suppliers.

The suppliers are our farmers and if you squeeze our farmers, you may get something cheaper in the shop but you're actually squeezing our communities because those farmers are recycling the pounds that they earn within our communities.

– Simon Thomas AM, Plaid Cymru Mid & West Wales

Simon Thomas added that the powers of the Supermarket Ombudsman, who deals with complaints that suppliers are being treated unfairly, need to be be beefed up considerably.

In response, the Leader of the House, Julie James, said ministers will be raising their concerns with the inquiry that the Competition Commission is expected to carry out before deciding if the merger can go ahead.

It is very worrying that such a large merger is being considered. It is subject to the Competition Commission but my understanding is that the Commission generally looks at the effects on consumers, not suppliers.

I share your concerns about the suppliers. There is only one way to squeeze and it is at that end [of the supply chain].

– Leader of the House Julie James AM

Details of the deal came after the companies – the UK’s number two and three supermarkets – confirmed on Monday morning that the deal will create a retail titan with a bigger share of the market than Tesco.

It would have combined revenues of £51 billion and boast a network of 2,800 Sainsbury’s, Asda and Argos stores.

It will see Asda owner Walmart hold 42% of the new business and receive £2.97 billion in cash, valuing Asda at £7.3 billion.