Asda owners lambasted by MPs over fuel prices and ‘fire and re-hire’ concerns

Asda executives have been accused of damaging the company’s brand after an “extraordinary” meeting with MPs over the supermarket chain’s fuel prices and employment practices.

Mohsin Issa, co-owner of the supermarket chain, and Hayley Tatum, chief people and corporate affairs officer, were called before the parliamentary business and trade committee.

After more than an hour of evidence in which MPs repeatedly asked questions they felt had gone unanswered, Darren Jones MP, Labour chair of the committee, said: “Might I say this has been quite an extraordinary session — not in the way that I hoped it would have been.

“What we have heard today is that prices are up at Asda, tax is down, pay is down, money is being taken through a very complicated set of business structures to offshore companies, and you’ve not answered any of our questions.

“I am very sorry we have spent an hour going round in circles and you have not been complying with the questions from this committee — it’s not in order and I think you have suffered to the detriment for the brand of Asda to your customers and to your suppliers.”

Issa and his brother Zuber bought Asda in 2020 and in May this year, Asda bought 350 petrol stations from sister business EG Group, to create a group comprising 700 petrol forecourts.

Both Asda and EG Group are co-owned by the Issas and TDR Capital, a private equity firm.

Issa’s committee appearance follows an investigation by the Competition and Markets Authority watchdog into Britain’s retail fuel market, prompted by concerns about high prices in the wake of Russia’s war on Ukraine.

The CMA’s report found that competition in the market had weakened, and retailers’ margins had risen significantly, with supermarkets’ average annual fuel margin climbing from 4.6p per litre in 2019 to 10.8p per litre in 2022. It said Asda had in 2021 increased its margin targets, with its pence-per-litre target by 2023 three times what it had been in 2021.

Issa said the company’s position that there had been no change to its fuel strategy since the business was bought from Walmart in 2021, and refused to separate the fuel business from the wider Asda empire.

When asked about concerns raised by the GMB Union that Asda has threatened to “fire and rehire” workers as part of planned pay changes, Tatum said no decisions had been made.

Tatum had described the practice – when an employee is told they will be let go unless they agree potentially weaker contract terms – as “dismiss and reengage” and insisted it was only a last resort.

The GMB, in May, claimed 7,000 workers had been threatened with the measure as part of discussions with the company over night shift payments that will see a premium payment removed, taking pay in to line across Asda.

“We don’t know whether we will end up in a fire-and-rehire position,” Tatum said. “It is a last resort . . . it’s not a threat — all other options are there as well.”