Asda owners questioned by MPS over action to stop price rises | Personal Finance | Finance

MPs have raised concerns that Asda’s “complex” ownership structure is stopping them from supporting customers through the cost of living crisis.

In a letter to Mohsin Issa, one of the supermarket’s co-owners, the chair of the business committee asked for details of Asda’s corporate structure, capital investment and profit margins on petrol.

Darren Jones, the chair of Parliament’s business and Trade Select Committee wrote: “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 from MPs comes after Asda was criticised for taking bigger profits from petrol after a competition watchdog found it had put a stop on price cuts when wholesale oil prices fell.

Asda denied any profiteering, although the Competition Markets Authority (CMA) has told them to make their food pricing clearer to help shoppers find the best deals.

An Asda spokesperson said: “Asda will continue to cooperate fully with the business and trade committee’s inquiry and will respond to its follow-up questions. “

The supermarket’s “complex” ownership structure stems from the Issa brother takeover in 2020.

They bought Asda for 2020 for £6.8bn deal, then merged it last May with the UK and Irish division of their petrol forecourt business EG Group.

This doubled Asda’s debts and increased interest payments from £90million in 2021 to more than £400million this year.

There is fear that this has restricted the chain’s ability to invest in low prices.

Asda stated they have maintained its position as the cheapest of traditional supermarkets on groceries and invested £40million to cut prices and keep them down for the rest of the year.

They also invested £70million in the launch of its Just Essentials range of 269 budget items.

An Asda spokesperson continued: “Asda’s owners are committed to the long-term sustainable growth of the business and are investing in both supporting customers and colleagues during these challenging times.”