If the government requests that supermarkets impose price caps on staple foods, the chairman of Asda has warned of "unintended consequences.".
Any such action, according to Stuart Rose, could be "counterproductive," and customers risk missing out on better bargains, he told the BBC.
His remarks came as Asda decided to pay £2.27 billion to acquire the UK and Ireland operations of the enormous EG Group gas station chain.
With the agreement, Asda will accelerate its growth in the convenience food industry.
The government is reportedly in discussions with supermarkets about setting a price cap on basic food items to help combat the rising cost of living, it was revealed over the weekend.
According to Mr. Rose, UK grocery stores are "already heavily competing with one another to give our customers the best possible deal" and are "well ahead of what the government can offer.".
"Starting to try and control markets or manipulate markets is not going to work," he said. "Be careful what you wish for and watch out for unexpected consequences. ".
Any government action to fix prices, according to him, "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 denying the customer of a better deal.".
So, that's anti-competitive, and in reality, it's almost like a cartel, and cartels are prohibited. ".
The British Retail Consortium, a trade group, has already stated that the potential measures would not affect prices "even the slightest bit.".
Two companies that are already owned by the billionaire Issa brothers are combined as a result of Asda's agreement to purchase the UK and Irish assets of EG Group.
Nearly £30 billion in revenue and 166,000 workers will be employed by the newly combined business.
All of Asda's rivals, according to Mr. Rose, operated convenience stores, so the deal was necessary. "Now that we're entering the convenience sector, we'll be a full-service retailer. ".
About 350 gas stations and more than 1,000 places to get takeout food are located in EG. It will rebrand all of its websites with the Asda name.
Asda, which is currently the third-largest supermarket in the UK, owns 438 gas stations, including 129 forecourts that it acquired from the Co-op last year for £600 million.
Asda "On the Move" convenience stores, which have been rolled out on EG sites since the Issa brothers acquired the supermarket in 2021, currently number 166.
The partnership, according to Asda co-owner Mohsin Issa, will "be good news for motorists, as we will be able to bring Asda's highly competitive fuel offer to even more customers.".
The Competition and Markets Authority (CMA) is currently looking into all supermarkets for charging excessive prices for food and fuel.
Although supermarkets claim they are working to keep food prices "as low as possible," the watchdog is investigating whether a "failure in competition" means that customers are overpaying.
According to a different investigation into the fuel market, some supermarkets have raised their margins on gasoline and diesel.
Over the next three years, Asda said it would spend more than £150 million integrating the two companies.
By utilizing the size of the new group and higher sales volumes, it hopes to achieve savings of about £100 million over the next three years.
The goal of the partnership, according to Susannah Streeter, head of money and markets at Hargreaves Lansdown, was to "win more grocery business from rivals by being super-competitive on petrol, Asda may do so at a time when grocery top-ups are all the rage, rather than dedicated weekly shops.".
"But the cost-of-living crisis continues to rage. For the foreseeable future, the pursuit of value might take precedence over convenience, she added.
Senior-level job cuts were expected, according to retail analyst Richard Hyman.
It was expected that the Issa brothers would want to combine the assets they already own, according to Mr. Hyman. "Cost-cutting will be their only motivation for doing this. ".
The deal, according to EG Group co-founder and co-CEO Zuber Issa, was "an important strategic step for EG Group.".
In a statement, he said that as a result of the sale, "EG Group will benefit from a significantly strengthened balance sheet.".
In addition to $1.4bn (£1.1bn) raised from a US deal, EG stated that the proceeds from the sale of its UK and Ireland business to Asda would be used to reduce debt.
The GMB union expressed concern that Asda would have "unsustainable" levels of debt due to rising interest rates.
"There is a huge question over who will pay the price for this debt leveraging," GMB national officer Nadine Houghton wrote in a letter to Mr. Rose. Will Asda's Southeast stores' 7,000 low-paid retail employees be among those to lose their jobs and be replaced?
Or is this merely the start of a general assault on the wages of working people at Asda?
