J Sainsbury and Asda have launched a legal challenge against the UK’s competition watchdog for failing to grant them enough time in the regulator’s in-depth probe into the pair’s proposed blockbuster merger.

The combination of the two supermarkets would upend the British grocery market, bringing to an end Tesco’s reign as the largest retailer by market share and reshaping the competitive landscape across the country.

Both retailers expected the deal to be referred to a so-called “Phase 2” investigation by the Competition and Markets Authority, where the body examines the likely impact of the merger on consumers and suppliers in detail.

On Wednesday however, Sainsbury’s said that together with Asda it would lodge an application with the Competition Appeal Tribunal for a judicial review into the CMA’s second phase investigation, arguing for a review of the timetable and process given the “unprecedented scale and complexity of the case”.

The current timetable has set a final deadline for deliberations of March 5 2019, with the full report to be published shortly afterwards. Oral evidence hearings have been held over the past few weeks and provisional findings are due in early January.

Sainsbury’s said both parties had made “repeated requests for additional time”, and that it was seeking an extra 11 working days over the Christmas period to respond to a large amount of material about the merger which they had recently been given.

But a CMA spokesperson said that investigating any merger of a similar size meant working through a “large volume of material in a short timeframe” and that it was “not unusual for the companies involved to do this in the timelines we have been working to with Sainsbury’s and Asda”.

Sainsbury’s said its move to challenge the schedule reflected both grocers’ view “that the current timetable does not give the parties or the CMA sufficient time to provide and consider all the evidence”.

The watchdog said, however, that it had done “everything we can to aid their consideration of this work, while still ensuring we are able to meet our legally binding deadline”, including extending some timelines where it made sense to do so.

“If we gave the companies the extra time they are now asking for, it would put our ability to complete the investigation by the required deadline at very serious risk,” the CMA spokesperson said. “As with all of our merger reviews, we construct our timetable to ensure that everyone has the chance to have their say, including customers, the companies involved and suppliers.”

A competition lawyer unconnected with the case said that the request for more time might have come as a result of a relatively short pre-notification period for a case of this complexity. Pre-notification, where the CMA and the parties lay out their respective cases before formal proceedings begin, ran from the end of April to the start of the phase 1 inquiry on August 23.

He also said some companies felt the CMA’s deliberations “are increasingly influenced by wider factors” such as fairness, concentration of market power, productivity growth and inequality and less by economic analysis. “There are fears the CMA is now part of a wider political debate,” he said.

A spokesperson for the two retailers said their action against the CMA was not a decision taken lightly. “It is about ensuring a thorough process and reasonable timetable. We remain confident in the case for merging the businesses and the significant customer benefits.”

Additional reporting by Jonathan Eley

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