MPs have expressed concerns over Asda’s ownership structure and its impact on consumer support during the cost-of-living crisis.
- Darren Jones has requested detailed information on Asda’s corporate structure, finances, and the Issa brothers’ assets.
- The Issa brothers’ ownership has reportedly doubled Asda’s debts, raising concerns about investment in lower prices.
- Asda has recently cut prices by an average of 11% on numerous products amidst these concerns.
- The supermarket was the first to publish local fuel prices online after MPs questioned fuel price hikes.
In light of rising living costs, Members of Parliament have raised significant concerns with Asda’s owners, Mohsin and Zuber Issa. These concerns focus on the supermarket’s ability to support consumers effectively, given the complexities of its ownership structure. Darren Jones, who chairs the business and trade select committee, has formally requested comprehensive details related to Asda’s corporate framework, capital allocation, and petrol profit margins.
Jones has also sought clarification regarding EG Group’s operations, a petrol forecourt venture acquired by Asda for £2.27 billion. Additionally, he has highlighted alleged purchases of private jets by the Issa brothers, pointing to potential financial misallocations that could impede Asda’s capability to mitigate the impact of cost-of-living pressures on consumers.
The strategic acquisition by the Issa brothers appears to have substantially increased Asda’s financial liabilities, with the retailer’s debts reportedly doubling and annual interest payments surging from £90 million in 2021 to over £400 million this year. Such financial strains raise doubts about the supermarket’s ability to uphold its commitment to offering competitive prices amidst economic challenges.
Despite these challenges, Asda has proactively invested £23 million in reducing the prices of 425 branded and own-label products by an average of 11%. Furthermore, it has continued its “Kids Eat for £1” initiative, demonstrating its effort to support its consumers during financially turbulent times.
Amidst scrutiny over fuel costs, Asda distinguished itself as the first UK supermarket to publish local fuel prices online, addressing public and parliamentary inquiries into purportedly excessive fuel charges.
The inquiry into Asda’s structural and financial strategies underscores the challenges faced by retailers in balancing corporate management with consumer support during economic hardships.
