Asda warns Scotland prices will rise if Yes wins

Supermarket giant Asda has warned of cost implications if Scotland votes in favour of independence.

Chief executive Andy Clarke said the company would have to "reflect its cost" to operate north of the border after a Yes vote.

His comments followed those of John Lewis Partnership chairman Sir Charlie Mayfield, who said shoppers would be likely to face higher prices post-independence.

Asda currently has 61 stores and depots in Scotland and employs 22,000 people.

Mr Clarke said he accepts the vote is a matter for the Scottish people but added that he would be "ducking his responsibility" if he did not offer an "honest assessment" of what independence could mean for his company.

He said: "It will be no surprise to voters that if Scotland votes for independence, it would be imperative to establish a separate Scottish business. Currently, our systems are set up for one single
UK market, we use the same currency and we operate under the same rates of VAT. By operating in a market serving 63 million customers we achieve major efficiencies and economies of scale.

"If we were no longer to operate in one state with one market and - broadly - one set of rules, our business model would inevitably become more complex. We would have to reflect our cost to operate here.

"This is not an argument for or against independence, it is simply an honest recognition of the costs that change could bring. For us, the customer is always right and this important decision is in their hands."

Sir Charlie said John Lewis had no intention of reducing its commercial presence north of the border, where it has nine shops, a contact centre and employs more than 3,000 people.

But he cautioned firms are unlikely to continue sharing the burden of higher operating costs in Scotland across all UK customers in the event of the break up of the union.

He said he would "regret" any move which damaged the retailer's partnership model.

Sir Charlie told BBC Radio 4's Today: "The debate has clearly become very, very fractious. As a businessman it is not my place to tell Scottish voters how to vote in next week's referendum.

"But I will say two things.

"From a business perspective there will be economic consequences to a Yes vote, not just in uncertainty but some of the turmoil we are hearing about.

"And it is also the case that it does cost more money to trade in parts of Scotland and therefore those hard costs, in the event of a Yes vote, are more likely to be passed on."

He went on: "On the day after the referendum the shops are going to open on time, nothing will change.

"For various reasons - regulation and transport costs etc - it does currently cost more money to serve parts of Scotland.

"Most retailers don't run different prices, they absorb that in the totality.

"If you go forward several years and you see a divergence of different things - particularly currency - that creates the likelihood, not the certainty, that costs would be higher.

"And when you are talking about two different countries it is most probable that most retailers would then start pricing differently.

"My view would be that the likelihood is that that would lead to some higher prices."

Asked about the potential impact on the business model of the employee-owned business which operates department stores and Waitrose supermarkets, he said: "Whatever happens in the referendum, we will continue and work extremely hard to make sure that we continue to be one partnership.

"But I would regret anything, obviously, which started to create divergence and really significant differences in the two markets that made it harder to achieve that."

Scottish Finance Secretary John Swinney said other major retailers had rejected claims prices would rise.

"Charlie Mayfield is entitled to his opinion," he told Today.

"But I noticed at the weekend that the line of argument being pursued by the Better Together campaign - which is in a letter that has gone to all households or many households in Scotland - suggesting this very point in connection with Tesco was rubbished by Tesco at the weekend.

"So I think the argument is one that is firmly contested by other retailers."

Pro-independence campaigners called for the withdrawal of the leaflets after a letter emerged from Tesco customer services which said there was "no truth" in the claim.

The company said the referendum is a "matter for the Scottish people" and that it has a neutral position on the debate.

The costs of supplying food in different markets can vary depending on labour and energy costs and government levies on some products, Tesco said, but added that suggesting a Yes vote would lead to an increase in food prices was "entirely speculative".

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