Russell Lynch: This grocery deal is a goner — and so is Sainsbury's Mike Coupe

Sainsbury’s chief executive Mike Coupe likes musicals — as we embarrassingly found out on the day this misconceived merger with Asda was first announced — but I wonder if he’s also a Monty Python fan.

The Competition and Markets Authority has done its best John Cleese turn today in its hammering of the tie-up.

With apologies to the classic sketch, this deal is no more. It has ceased to be. It’s expired and gone to meet its maker.

The provisional findings are brutal stuff and it’s a real statement from a watchdog keen to show its fangs and look after the interests of shoppers under new chairman Andrew Tyrie.

The former Treasury Select Committee inquisitor’s forensic skills have been brought to bear here, resulting in a complete dissection of Coupe’s vague claims of a 10% price cut for shoppers.

“Higher prices, reduced quality and choice and a poorer overall shopping experience,” is about as damning a verdict as you can get.

Suppliers braced for a steam-rollering from the new Sasda behemoth will also be breathing sighs of relief.

Hence the petulant response from a “surprised” Sainsbury’s, which is complaining about the methodology used by the watchdog and seems likely to end up back in court with the CMA, which it reckons has “moved the goalposts”.

I’m less surprised over the response of the regulator myself: did Coupe really think that the competition authority was going to sit back and sanction the creation of another 30% gorilla in the market, establishing an effective duopoly? The reality is that neither the discounters Aldi and Lidl, with less than 13% of the market between them, nor the as-yet-unrealised threat of Amazon were ever going to be credible excuses to get this deal over the line.

Merging four into three is always a tougher sell to competition regulators as they worry about “co-ordinated effects” on the market. It makes it easier to keep tabs on each other’s prices, which tend to drift up as a result.

Academics also said of this particular tie-up that the temptation would be for the new giant to price keenly on the products sold by the discounters, while pushing up prices elsewhere.

It’s tough to see a way out for Coupe personally as he has staked his reputation, not to mention spending millions of pounds of shareholders’ cash in fees, on a venture that looked a high-risk punt from the start.

And it’s surely difficult for him to stay on and present a credible story to investors when his chairman, David Tyler, has been going around warning that Sainsbury’s will be unable to compete unless this deal gets over the line.

Tyler hands over the reins to Martin Scicluna next month and his first job will be to find a new chief executive. This one is a dead parrot.