GUPPI In Supermarket Mergers: the UK’s Asda/sainsbury Case

Antitrust Economics at a Times of Upheaval, by J. Kwoka, T. Valleti and L. White (Editors), Forthcoming

29 Pages Posted: 1 Mar 2023

See all articles by Howard W. Smith

Howard W. Smith

University of Oxford - Department of Economics

Date Written: February 2023

Abstract

The UK supermarket industry has a high profile because of its large share of household budgets. In 2003 the UK competition authorities blocked all potential mergers between the top-three firms and the fourth. After this, there was an apparent consensus that mergers between the largest four supermarkets would be unsuccessful with competition authorities. In 2018, Asda and Sainsbury two of the largest four firms, decided to challenge the consensus with a proposal to merge. Their bid failed. This chapter discusses the case. We discuss two changes in the 15 years between 2003 and 2018: (i) changes to the industry including the rise of new low-price firms and (ii) changes to the way mergers are assessed by competition authorities, particularly the use of a new indicator of competitive harm, namely, the Gross Upward Pricing Pressure Index (GUPPI).

Keywords: GUPPI, Mergers, Supermarkets

JEL Classification: L13, L40

Suggested Citation

Smith, Howard W., GUPPI In Supermarket Mergers: the UK’s Asda/sainsbury Case (February 2023). Antitrust Economics at a Times of Upheaval, by J. Kwoka, T. Valleti and L. White (Editors), Forthcoming, Available at SSRN: https://ssrn.com/abstract=4370797 or http://dx.doi.org/10.2139/ssrn.4370797

Howard W. Smith (Contact Author)

University of Oxford - Department of Economics ( email )

Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom

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