Sainsbury’s and Asda executives will benefit from the proposed merger – but it’s unlikely anyone else will

The trouble with deals like this one is that it is often hard to find any winners two, three years out with the exception of the executives whose pay packets only ever head in one direction

The Competition and Markets Authority’s verdict is likely to be inconclusive (Getty)

Millions of us will go to either Sainsbury’s or Asda this weekend. We are now just a matter of days away from being told whether the two of them can become one.

The Competition Commission’s provisional findings on their proposed mega-merger will have far-reaching implications for both businesses, their suppliers, partners, employees and for all of us who shop at one, or the other, or both of them.

The two are proposing to create a behemoth with a market share similar to that held by market top gun Tesco. Asbury’s (although they won’t call it that) and Tesco would together account for about 60 per cent of the market.

So, big deal, even bigger controversy.

What discussions about Asbury’s don’t always consider is that its creation is a function of the merger partners’ weakness.

Asda is only now reviving itself after a catching a nasty case of retail flu. Sainsbury’s has lately replaced it as the sector’s problem child. Both continue to lose market share to Aldi and Lidl, the German disrupters, which continue to lure shoppers with their mix of high-quality, non-branded goods sold at rock-bottom prices.

And then there’s Amazon, currently working in partnership with Morrisons.

Together, so the rationale goes, Asda and Sainsbury’s would be in a better position to stop the rot and compete in the supermarket slugfest. On their own? Things might get sticky for one, if not both of them.

Ahead of the announcement, the ground is being prepared for what could be a humdinger of a fight, particularly if the commission plays hardball (as it has been doing of late) and demands a mass sell-off of stores as its price for green lighting the deal.

As part of that, one of the points being made is this: Asbury’s will not only employ a lot of people, it will pay an awful lot of tax, orders of magnitude more than Alda and Lidl do here. As for Amazon, well it ponies up the equivalent of half a banana and a pack of Polo mints in corporation tax and its distribution centres are located in areas where land is cheap, which keeps its business rate bills to a minimum too.

Shouldn’t we therefore look to support what will be a British business, the contributions of which to the exchequer will keep hospitals in meds and schools in teachers?

The flaw in this reasoning is obvious. Just because a business is going to pay a lot of tax is no reason to support a bum deal if it’s going to hurt consumers and suppliers.

Asbury’s says it won’t, and that the consumer will benefit from low, low prices through the buying power that the combined operation will have, and the lower cost base it will be able to operate off. Everyone’s a winner. Except, of course, those people who lose their jobs through the creation of that lower cost base.

The trouble with deals like this one is that it is often hard to find any winners two, three years out with the exception of the executives whose pay packets only ever head in one direction and who like big mergers because they get to play Bruce Forsythe’s fatcat Play Your Cards Right. “Now then viewers, we have Sainsbury’s boss Mike Coupe here. Mike, your current salary card is a King. What do you think the next one will be?”

“Well Bruce, I’m thinking Ace, so I’m going to go higher, higher!”

But when it comes to the sort of businesses we want to succeed, shouldn’t we at least ask the question? Shouldn’t the way businesses behave, with respect to tax and the way they treat their workers, come into the equation?

The CMA’s investigation has been rigorous, and exhaustive, but narrow. Questions of public interest don’t come into it.

This country has long taken the view that anything goes just so long as the competition watchdogs are ok with it. Decisions about the future of a business should be left to shareholders, even if those shareholders happen to be hedge funds using financial engineering to obtain stakes that they keep for only as long as it takes to make a quick buck.

The latter played a role in another great albeit troubled British firm, GKN, an engineering business, falling prey to Melrose, which buys up companies like it, kicks them about, and sells them off.

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All this has left us with an economy that serves only a small number of very wealthy people well. A vanishingly rare positive of Brexit is it has raised genuine questions about the wisdom of the way the economy has been run.

The CMA’s verdict is likely to be inconclusive. It will recognise that the merger poses a threat to competition, and propose remedies, likely involving the disposal of significant number of Asbury’s stores.

There will be a lot of to-ing and fro-ing after that, possibly including threats of judicial review (there’s already been one of those), and at the end, the two sides will have to decide whether it’s still worth going ahead.

Future investigations of deals like this really ought to be somewhat wider in scope because they matter. They affect all of us, and we have a legitimate interest in how they play out.