Stuart Rose, the chairman of Asda, has criticised government plans to impose price caps on basic food items, warning of 'unintended consequences' and describing the idea as 'counterproductive'. In an interview with the BBC, Rose argued that supermarkets 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 could create a cartel-like situation, which is illegal. His comments come as the government considers asking supermarkets to cap prices on essential goods to help with the rising cost of living. The British Retail Consortium has also dismissed the proposal, saying it would not make a 'jot of difference to prices'.
The remarks were made as Asda announced the acquisition of EG Group's UK and Ireland business for £2.27bn. The deal, which brings together two companies already owned by the Issa brothers, will create a combined entity with revenues of nearly £30bn and around 166,000 employees. Rose said the move was necessary to compete in the convenience store sector.
Asda plans to rebrand all EG sites under its name and invest over £150m in integration over the next three years, aiming for £100m in savings. However, retail analyst Richard Hyman predicted job cuts at senior levels, and the GMB union expressed concerns about rising debt levels.
