Stuart Rose, the chairman of Asda, has criticised government proposals to impose price caps on basic food items, warning of 'unintended consequences' and describing the idea as potentially 'counterproductive'. In an interview with the BBC, Rose argued that UK food retailers are already competing fiercely to offer the best deals, and that government intervention could prevent customers from accessing even lower prices.
Rose stated that fixing prices would be anti-competitive and akin to forming a cartel, which is illegal. His comments come as the government holds talks with supermarkets about capping prices on essential items to help with the rising cost of living. The British Retail Consortium has also dismissed the measures, saying they would not make a 'jot of difference to prices'.
The remarks coincided with Asda's announcement that it will acquire the UK and Ireland business of petrol station giant EG Group for £2.27bn. The deal, which brings together two companies already owned by the billionaire Issa brothers, will create a combined entity with revenues of nearly £30bn and around 166,000 employees. Asda plans to rebrand EG's 350 petrol stations and over 1,000 food-to-go locations under its own name.
Asda co-owner Mohsin Issa said the combination would allow the supermarket to offer highly competitive fuel prices to more customers. However, the Competition and Markets Authority is currently investigating supermarkets over high food and fuel prices, examining whether a lack of competition is leading to overcharging.
Retail analyst Richard Hyman predicted job cuts at senior levels as a result of the consolidation, while the GMB union expressed concerns that rising interest rates could burden Asda with unsustainable debt. Asda plans to invest over £150m in the next three years to integrate the businesses, aiming for savings of about £100m through economies of scale.
