Chairman of supermarket Asda has warned of "unintended consequences" if the government goes ahead in imposing price caps on basic food.
Reacting on the recent reports that the government is in talks about asking supermarkets to cap prices on basic food items to help tackle the rising cost of living, Stuart Rose has said that any such move could be "counterproductive".
Rose told the BBC that UK food retailers were "already competing very heavily with each other to give our customers the best possible deal" and were "well ahead of what the government can offer".
"Starting to try and manipulate markets or control markets is is not going to be effective," he said. "Be careful about what you wish for, be careful about the unintended consequences."
He said any action by the government to fix prices "actually would be counterproductive because if you say you're going to fix the price and suppose then you could actually do it cheaper and you'd agree to keep it at a higher price, you'd be depriving the customer of a better deal".
"So that's the anti-competitive and actually it's almost a cartel, and cartels are illegal," Rose said.
His comments amid reports that Asda has agreed to buy the UK and Ireland business of petrol station giant EG Group for £2.27 billion, bringing together two businesses that are already owned by the billionaire Issa brothers.
Asda, owned by the Issa brothers, investment funds managed by TDR Capital LLP and Walmart (the “Shareholders”), is acquiring the EG UK and Ireland business consisting of c. 350 petrol filling station (“PFS”) sites and over 1,000 food-to-go locations
The newly-combined company will have revenues of nearly £30bn and employ about 166,000 people. There are already 166 Asda "On the Move" convenience stores, which have been rolled out on EG sites since the Issa brothers bought the supermarket in 2021.
Following completion of the transaction, Asda plans to invest more than £150m within the next three years to fully integrate the combined business.
Rose said the deal was needed as all Asda's competitors ran convenience stores.
"We are now going to be in the convenience business, so we'll be a complete retailer," he said.
