British politicians have accused the boss of Asda of pushing up prices, lowering wages and taking money out of the grocery business through opaque offshore structures.
Mohsin Issa, co-owner of Britain’s third-largest supermarket chain, was recalled to Parliament to answer questions on the price of gas at its forecourts around the country, after the UK antitrust regulator said its margins on fuel had tripled.
Britain is in the grip of a cost-of-living crisis, and Asda is among the supermarkets that are large sellers of gas being targeted by energy secretary Grant Shapps. He has accused them of ripping off customers by failing to pass on falling wholesale prices at the pump.
In an emailed statement Wednesday, the grocery-store operator denied this, saying “the presence of an Asda petrol station in a local area keeps prices down for all motorists.”
Asda said its profits fell last year “as a direct result of absorbing inflation to keep grocery prices as low as possible, while investing in new initiatives to help families during the cost-of-living crisis.”
Asda is owned by Mohsin, his brother Zuber and the private equity firm TDR Capital. Walmart Inc. retains a minority stake. The supermarket caters to the value end of the market and there have been fears that since its private equity takeover its historic focus on keeping fuel prices low could change.
Asda and grocery rivals, along with gas providers such as BP Plc and Shell Plc, are under pressure to explain why they have failed to fully pass savings to customers.
The MPs questioned Issa about Asda’s ownership structure, which includes the low-tax jurisdiction of Jersey. They also repeatedly asked about the company’s attitude to fuel pricing, and its position on staff wages. Issa said the company had paid no dividends to shareholders, and added that his ownership was based in a low-tax jurisdiction because that’s what his advisers “recommended we do.”
“What we’ve heard today is that prices are up at Asda, taxes are down, pay is down and money is being taken through a very complicated set of business structures onto offshore companies. And you’ve not answered any of our questions,” said Darren Jones, chair of the Business and Trade Committee, who also criticized Issa for “going round in circles” and refusing to answer questions.
Issa repeatedly declined to say whether the grocer’s fuel margins had increased, saying only that Asda’s “pricing strategy” hadn’t changed since he took control of the company in 2021.
Britain’s antitrust regulator, the Competition and Markets Authority, told the committee that Asda had increased its internal fuel-margin targets on a pence-per-liter basis, meaning they were three times what they were in 2019. “Asda told us that they saw an opportunity to deliberately feather prices on fuel as they came down from the peak,” said Dan Turnbull, director of markets at the CMA.
In response, Issa said: “The strategy did not change, our strategy has not changed. We remain the price leader on fuel — the CMA report confirms that.”
(Updates to add statement from Asda in fourth and fifth paragraphs.)
