Food prices: retailers raise concerns about government ‘plans to cap prices of staples’

The trade association representing UK retailers has raised concerns about government plans to ask supermarkets to introduce voluntary price caps on food staples to ease cost-of-living pressures.

The British Retail Consortium (BRC) says the proposals would not make a “jot of difference” to pricing and might in fact hinder efforts to bring inflation down.

What are the plans?

According to The Sunday Telegraph, which first reported the story, retailers would be encouraged to charge the lowest possible amount for some basic products like bread and milk. But the scheme would be voluntary and supermarkets could choose which items they capped.

A Number 10 source said the proposal was at the “drawing board stage” but insisted that formal price controls would not be imposed on shops.

What concerns do retailers have?

Andrew Opie, director of food and sustainability at the BRC, said the plans would have little effect on prices. He went on: “As commodity prices drop, many of the costs keeping inflation high are now arising from the muddle of new regulation coming from government”.

“Rather than recreating 1970s-style price controls, the government should focus on cutting red tape so that resources can be directed to keeping prices as low as possible”.

Is the government pushing ahead anyway?

Asked about the proposals on the BBC’s Sunday with Laura Kuenssberg programme, Health Secretary Steve Barclay said: “My understanding is the government is working constructively with supermarkets as to how we address the very real concerns around food inflation and the cost of living, and doing so in a way that is also very mindful to the impact on suppliers.”

Barclay acknowledged small family-run businesses would themselves be under “significant pressure” and stressed the plans are “not about any element of compulsion”.

Food prices expected to keep rising

The plans emerged after Chancellor Jeremy Hunt revealed he backed further interest rate hikes to combat inflation, even if it risked plunging the UK into recession.

Despite falling from 10.1%, the Consumer Prices Index of inflation remains high at 8.7%, while experts have warned that alarmingly expensive food is set to overtake energy bills as the “epicentre” of the cost-of-living crisis.

Food prices are expected to keep rising, having already increased by 19.1% in the year to March, placing additional pressure on families.