MPs have flagged that Asda’s ownership structure could be limiting the supermarket’s ability to help shoppers amid the ongoing cost of living crisis.
In a letter to one of the billionaire brothers who bought the supermarket with private equity firm TDR Capital back in 2020, Darren Jones, the chair of parliament’s business and trade select committee, has asked for details of its corporate structure, capital investment and profit margins on petrol.
In the letter he also requested details on loans from the Issas’ petrol forecourt operation, EG Group, which helped fund the buyout of Asda.
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Jones’ letter published on the committee’s website said: “The committee has concerns that the complex company structure within which Asda sits, and associated decisions on financing, may restrict your ability to help meet cost of living pressures on your customers.”
The letter comes after Asda was criticised by MPs for taking bigger profits from petrol after a competition watchdog found it had put the brakes on price cuts when wholesale oil prices fell.
Back in July Mohsin Issa angered parliament during his “extraordinary” appearance before the business and trade committee.
MPs described the session as “drawing teeth” after accusing Issa of failing to answer questions about the supermarket’s fuel prices, finances and treatment of staff.
Issa stressed that the group’s pricing strategy had not changed under his ownership and that Asda was still a “price leader on fuel”.
There are fears that the structure of the Issa takeover, which doubled Asda’s debts and increased interest payments from £90m in 2021 to more than £400m this year, has restricted the chain’s ability to invest in low prices.
Earlier this year, the brothers agreed to sell the UK and Ireland operations of petrol station business EG Group to Asda in a £2.3bn deal to help cut down the group’s piling debts.
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