Watchdog moved the goalpostsAs far-reaching as this decision could be for the future of Britain’s supermarket industry, perhaps the most interesting point to come out of today’s news is not to do with Sainsbury’s or Asda but the watchdog that has scuppered their hopes. Some analysts say that the CMA’s tough approach towards a merger of this scale meant that the chances of getting the green light was always slim. Sainsbury’s and Asda’s confidence was largely based upon the CMA’s approval of the Tesco-Booker deal, which saw the country’s largest retailer acquire the country’s largest wholesaler.
But according to Clive Black of Shore Capital: "While the Tesco deal was a retailer acquiring a wholesaler, this was a retailer acquiring another retailer". He tells City A.M.: "There was a certain degree of naivety as well as over-ambition that blinded all the participants from day one." Richard Lim, boss of Retail Economics, adds that the CMA moved the goalposts since previous deals such as the Tesco-Booker merger, meaning that "from the off it was almost as if this was doomed for failure". Neil Wilson, chief market analyst at Markets.com., agrees: "The merger never looked like it would pass the CMA’s tests, however fickle the regulator may seem post Tesco-Booker."