It’s been variously referred to as Sasda, Jasda and Sainsda. But this deal is an Asbeen. It’s dead and Sainsburied.
Sure, Mike Coupe and his team of expensive advisers may seek a judicial review. But that would be another expensive misjudgment. The CMA’s provisional findings could not have been more damning. It’s an unsubtle rebuke to an unsubtle proposal.
Forget the pre-Christmas timetable row. The deal looked awkward from the start. Its basic supposition was that if the Tesco-Booker deal could be waved through, why not Sainsbury’s-Asda?
But the deals are incomparable. Booker is a wholesaler, with no shops, and a focus on convenience and the horeca market. Sainsbury’s has toyed with wholesale (via Euro Garages and latterly WH Smith) but Asda is a different animal. A beast of a retailer. Subtle this was not.
Sainsbury’s was emboldened by the precedent Tesco-Booker created, in which the impact of the discounters on the market was finally acknowledged. But the CMA refused to roll over and be tickled at the Sainsbury’s-Asda solution, which amounted to a promise that some of the synergies would be invested into cutting prices on 1,000 lines. That was another not-so-subtle signal that it would go after the discounters. But how was that a guarantee? If it worked what would be the incentive to maintain low prices?
Sainsbury’s-Asda also argued that with new players like Just Eat and Deliveroo, consumption of food and drink was changing. Sure. So why not enter a complementary market, as Tesco did with its Booker deal?
In short the deal felt from the outset like a defensive one. To protect it from the discounters, and Amazon, and level the playing field with Tesco. That was never going to wash with the CMA.
So it’s back to the drawing board. Mike Coupe will need to sing a different tune (Boulevard of Broken Dreams?) and may soon be looking over his shoulder.
In the meantime, suppliers will be fearing what an angry Sainsbury’s may do next.