Asda questioned by MPs over ability to meet cost-of-living pressures

The Business and Trade Committee has warned that Asda’s complex company structure and associated decisions on financing could restrict its ability to help meet cost-of-living pressures for its customers.

In a letter to the British supermarket, chair of the Committee Darren Jones MP made a number of requests for information about the company’s finances, including about a discrepancy in its accounts between revenue and operating costs.

“While it is not usual for us to ask such specific financial questions of a private company, your choice of company structure makes it very difficult for anyone to understand where finance originates and then moves within your business, and what the implications might be for your customer base,” he wrote.

The move comes after Asda's chief executive came under fire during meeting with the Committee in which he ducked questions about the retailer's alleged anti-competitive fuel pricing practices.

At the meeting, Asda boss Mohsin Issa and the supermarket’s chief people officer Hayley Tatum were abraded over their conduct during the session.

At the meeting’s conclusion, Jones told the pair: “This has been quite an extraordinary session... you've not answered any of our questions.”

The session followed a previous meeting with Asda’s chief commercial officer Kris Comerford, after which the Committee flagged concerns about so-called discrepancies made between his statements and findings of possible anti-competitive practice by the CMA.

Following the session, Issa was called back to give evidence to clarify evidence given by Comerford.

In the letter, Jones asks Issa for a corporate structure chart setting out the relationship of various companies that sit above Asda and explaining what each entity is incorporated to do.

The chair also asked for clarification about dividends, suggesting that while Issa had previously said no dividends had been paid out, accounts suggest that a dividend of £1.7 billion was made to an organisation called Bellis Acquisition.

Additionally, he queried the chief executive about what the Issa brother-owned EG Group, which was bought by Asda earlier this year, will do with the proceeds of its sale.

"It is suggested that this intercompany deal between Asda and EG Group is merely taking cash from Asda to pay off some of the debt you incurred to buy Asda in the first place," writes Jones, calling on Asda to comment on the claim.

He continued: "Prior to the purchase of EG Group by Asda, it was reported that EG Group lent you and your brother tens of millions of Euros in interest free loans to purchase private jets. Can you confirm whether this report is accurate?"

Jones also referred back to claims about the price of petrol at the supermarket, suggesting that a whistleblower had said that under the Issa brothers' ownership of the company, the margin on the price of petrol had changed compared to when Walmart owned Asda.

He said that while a previous answer from the company had suggested that Asda still intends to be a market leader, meaning being the cheapest, the company had previously declined to answer a question about margin.

Jones asked Asda to list what the margin has been for each week during financial year 2022/23 for both petrol and diesel.

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