Asda’s potential merger with EG Group could “threaten food supply, fuel prices and 100,000 jobs,” GMB Union has warned.
The plan, which will unite Asda and EG Group’s UK subsidiary, is part of the Issa Brothers’ continued efforts to decrease EG Group’s £7 billion debt burden.
However, fears have been raised that the plan may raise the retail firms’ existing debt, which presently stands at £4.7 billion.
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As a result, the trade union has urged the Secretary of State for Business and Trade, Kemi Badenoch, to intervene and direct the Competition and Markets Authority (CMA) to conduct a thorough investigation into the merger
In a letter this week, the union told Ms. Badenoch the £7 billion EG debt is due to be refinanced in 2025, when interest rates are anticipated to be much higher, putting Asda in a “perilous financial position.”
The letter explained allowing the merger to go ahead “would be deeply irresponsible for several reasons.”
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GMB national officer, Nadine Houghton said: “Firstly, it risks the jobs of more than 100,000 employees. As one of the largest private sector employers in the UK, the future sustainability of the business is a matter of national, public interest.”
She said that this would also “place the future of the UK’s food supply chain at risk by loading even greater debt onto one of the UK’s Big 4 supermarkets,” and “have a chilling effect on competition for fuel prices by creating a ‘super retailer’ of more than 700 petrol stations.”
Houghton said: “GMB calls on the secretary of state to ensure the CMA investigates thoroughly – and that additional investigatory and enforcement powers are given with the Competition and Markets Bill now coming to the floor of the house,”.
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Source: Grocery Gazette
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