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Asda and Sainsbury’s bosses accused of ‘talking baloney’ to MPs

4:46 pm, 20th June 2018

Roger Burnley, chief executive of Asda, and Mike Coupe, his counterpart at Sainsbury’s, were giving evidence to the environment, food and rural affairs committee about the potential effects of the £14bn deal, particularly on suppliers.

Members of the committee asked a succession of questions about claims that the combined company would cut the prices of everyday items by 10%.

He said it was “unbelievable” that suppliers would not bear the burden of those cuts – a claim that both retailers denied.

The fiercest barrage came the way of Mr Burnley, who appeared first. Committee chair Neil Parish accused him of coming up with “nursery rhymes” and “Mickey Mouse figures” to justify his company’s merger with Sainsbury’s.

Mr Burnley said the two companies would “do an even better job for customers” and said there would be a “step change”. He promised that Asda and Sainsbury’s would continue to operate “fiercely” as two separate brands.

But Mr Patrick, clearly annoyed, said: “No you won’t. That is unbelievable. If you are going to make anything like the 10% saving that you have promised then you will have to do joint buying.

“Don’t come here and talk baloney. I can add up – I am not that stupid.

“Tell us some truths. You might have two separate brands for five minutes, six months or even a year. But your proposal to the Government is just political correctness.

“It is a cut-throat business and I know exactly whose throat you will cut.”

Mr Parish asked for a “categoric assurance” that savings would not come from the primary producers – such as British dairy farmers.

Mr Burnley said that he could assure the committee that savings were not based upon getting a “10% saving” but could not provide any more details because they were “confidential and market sensitive”.

Mr Parish, in return, described Mr Burnley’s analysis as “unbelievable…Mickey Mouse figures”.

Mr Parish later accused the Asda boss of “misleading” the committee in a dispute over the amount of the grocery market that would be controlled by the merged group, and also referred to him as “bizarre” and “not truthful”.

Mr Coupe also faced criticism, with Mr Parish saying “I don’t believe you” during a feisty exchange about supply chains, and about the proposals to cut prices by 10% without reducing payments to suppliers in this country.

“You and Asda are playing us for fools,” said Mr Parish.

Mr Coupe, in response, said that the vast majority of products in both stores came from a small number of international companies, and that there would be no pressure to squeeze smaller-scale suppliers in Britain.