Asda merger is blocked for a decade

Questions over future of Sainsbury’s chief

SAINSBURY’S will be banned from revisiting its botched merger with Asda for at least a decade, in a fresh blow for embattled boss Mike Coupe.

In a draft order, the Competition and Markets Authority proposed that the two supermarkets should be prevented from attempting to join forces for ten years after it blocked the tie-up last month.

It is a further setback for chief executive Coupe, 58, whose job is said to be hanging in the balance after he was criticised for pursuing the failed merger and taking his eye off the day job.

Coupe was the mastermind of the tieup and held secret talks with Asda boss Roger Burnley for two years before the plans were made public.

He was left red-faced when he was caught singing show tune We’re In The Money between television interviews when the deal was finally announced a year ago.

Sainsbury’s recruited former RSA Insurance boss Martin Scicluna to replace David Tyler as chairman in March, prompting speculation that he could order a major overhaul of the supermarket’s top team.

Clive Black, head of research at investment group Shore Capital, said: ‘If either Sainsbury’s or Asda thought they could come to revisit this any time soon, then they were living in cuckoo land.’

Shares in the grocer have plunged to a 30-year low amid investor concerns that it is struggling to compete against big four rivals such as Tesco, as well as German discounters Aldi and Lidl. Last night the stock fell further, closing down 2.2pc, or 4.3p, at 195.05p. Black said the fall proved that Sainsbury’s desperately needed to come up with a plan to revive its fortunes.

He said: ‘That shows you how badly things have deteriorated and the market will be looking to the board to state how it expects to improve that clearly very poor share price performance.

Sainsbury’s full-year profits slumped almost 42pc to £239m after it blew £46m on fees and other costs during the botched merger bid. The CMA ruled that shoppers and motorists would be worse off under the tie-up, suggesting it would lead to price rises and poorer quality for customers. Coupe ( pictured) had promised to hand shoppers price cuts worth £1bn as part of the deal. The decision to block the deal was described by experts as ‘uncharacteristically strong’ for the CMA, which has been previously criticised for a soft touch approach to regulation. But the case was seen as the first major test for former Treasury committee chairman Andrew Tyrie, who was made chairman of the watchdog a year ago.

During his time as an MP when he led the committee, Tyrie earned a reputation as the scourge of the City and a fierce interrogator of British banking giants.

Asda owner Walmart is plotting to exit the UK and offload the British grocer through a stock market listing, 20 years after it was delisted.

The CMA has given third parties such as rival supermarkets and suppliers until June 24 to comment on the draft order.

Sainsbury’s and Asda declined to comment last night.