The UK government has asked supermarkets to consider voluntary price freezes on essential food items to shield consumers from inflation driven by the Middle East conflict. In return, retailers would be offered regulatory relaxations, including easing packaging rules and postponing changes to healthy food regulations.
Retailers have dismissed the proposal as unjustified and warned it could push up prices across the board. One supermarket executive described the idea as “completely mad”, while another said it was “an unnecessary, unwanted and unjustified intervention in the market”.
Under the discussed plan, supermarkets would be expected to stock at least one version of basic items such as bread, milk and butter at a set low price. However, sources said this would incur significant costs, as ensuring availability could force retailers to discount branded lines if cheaper alternatives ran out.
Helen Dickinson, chief executive of the British Retail Consortium, said the UK already has the most affordable grocery prices in western Europe due to intense competition. She argued that the government should focus on reducing public policy costs that push up food prices, rather than introducing “1970s-style price controls”.
The move comes after the Scottish National party pledged to fix prices on 20 to 50 items such as bread, milk, cheese, eggs, rice and chicken, a proposal retailers branded a “potty gimmick”. Chancellor Rachel Reeves met supermarket bosses last month to discuss the cost-of-living impact of the Middle East conflict, and is due to announce measures on Thursday, though no agreement has yet been reached.
Meanwhile, the government has announced plans to give regulators greater powers to “name and shame” companies that raise profit margins unjustifiably during a crisis. The Competition and Markets Authority will also form a working group to monitor the response to the conflict. UK retailers, farmers and food producers have warned that without government help, price rises and shortages are likely.
