Asda owners questioned by MPs over finances and price rises

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

“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,” Jones wrote in the letter published on the committee’s website.

Jones also asked for details about levels of investment and loans from EG Group, which helped fund the buyout of Asda from Walmart.

“When you and your brother bought Asda from Walmart for £6.8bn, you personally invested £200m. Where did this finance come from?” The letter read.

“These questions are to help us understand if you are enabling Asda to do all that it can to help keep costs down during a cost-of-living crisis.”

Issa was also questioned on whether millions in interest-free loans were used to buy private jets.

There are concerns that the structure of the Issa brothers’ ownership has limited the retailer’s ability to invest in low prices as the takeover doubled Asda’s debts and increased interest payments from £90m in 2021 to more than £400m in 2023.

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. 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.”

Back in July, politicians asked questions about Asda’s margins on petrol and soon after the Competition Markets Authority (CMA) told UK grocers to make their food pricing clearer to help shoppers compare prices.

Asda has since invested £40m to keep prices low for the rest of the year, and is investing £23m in cutting prices on 425 branded and own-label items in a bid to help households during the cost-of-living crisis.