MPs are scrutinizing Asda to determine if financial concerns are impeding its efforts to combat surging prices. The chair of the business committee has penned a letter to one

of Asda's co-owners, seeking clarification on the company's intricate structure and information regarding loans and investments.

This inquiry comes on the heels of Asda executives facing questioning by politicians in July regarding concerns about soaring fuel prices. Asda has stated that it is cooperating with the committee's investigation.

The billionaire Issa brothers acquired Asda in a £6.8 billion deal in 2020. They subsequently merged it with the UK and Irish division of their petrol forecourt business, EG Group, in May of the following year, significantly expanding Asda's network of filling stations.

However, unions have voiced concerns that this acquisition, which doubled Asda's debt levels, could leave the supermarket chain vulnerable to rising interest rates.

Labour MP Darren Jones, the chair of the Commons business committee, penned the letter addressed to Mohsin Issa, raising questions about whether Asda's "complex company structure" might hinder its ability to alleviate the cost-of-living pressures on its customers. The letter also requests additional details about the levels of investment and loans from EG Group, which played a role in financing the acquisition of Asda from the US supermarket giant Walmart.

The letter also inquires about the source of Mohsin Issa's £200 million personal investment when acquiring Asda from Walmart and whether interest-free loans in the millions of euros were utilized for private jet purchases.

These questions aim to assess whether Asda is doing everything in its power to mitigate costs during a period of rising living expenses.

The Issa brothers have faced criticism in recent months, including during their appearance before MPs regarding fuel prices and employment practices. During a committee hearing in July, concerns were raised about Asda's profit margins on petrol.

The UK's competition watchdog has also conducted investigations into concerns that grocers, including Asda, were not passing on reduced wholesale food and fuel prices to consumers. While grocers deny profiteering, the Competition Markets Authority (CMA) has instructed them to clarify their food pricing to aid shoppers in finding the best deals.

Additionally, grocers have been directed to establish a scheme allowing motorists to compare real-time fuel prices online, as the CMA concluded that drivers had been overcharged due to limited competition. Petrol and diesel prices have declined since the record highs of the previous summer, triggered by Russia's invasion of Ukraine.

The CMA found that the average annual supermarket margins on fuel had increased by 6 pence per litre between 2019 and 2022, resulting in an additional £900 million in costs for drivers.

Like other grocers, Asda has reduced the prices of some essential items recently, recognizing that many households are grappling with the escalating cost of living.

An Asda spokesperson has stated that the company will fully cooperate with the committee's investigation and respond to any follow-up inquiries. They reiterated the owners' commitment to the long-term sustainable growth of Asda, emphasizing their investment in supporting customers and colleagues during these challenging times. Photo by Rept0n1x, Wikimedia commons.