The UK government has asked supermarkets to consider freezing prices on essential food items to shield consumers from inflation driven by the Middle East conflict. In exchange, retailers would benefit from eased regulations, including relaxed packaging rules and a potential delay in healthy food legislation.
However, retailers have rejected the proposal, calling it 'unjustified' and warning it could raise overall costs for shoppers. One supermarket executive described the idea as 'completely mad', while another said it was an 'unnecessary, unwanted and unjustified intervention in the market.'
The British Retail Consortium's chief executive, Helen Dickinson, argued that the UK already has the most affordable grocery prices in western Europe due to fierce competition. She urged the government to focus on reducing public policy costs that drive up food prices, rather than introducing '1970s-style price controls.'
A well-placed source said retailers had discussed stocking at least one version of basic items like bread, milk, and butter at a set low price, but ensuring availability could force discounts on branded lines if cheaper options run out. The source called the potential cost 'huge' and warned of unintended consequences on other products.
The proposal follows a meeting between Chancellor Rachel Reeves and supermarket bosses last month. Reeves is expected to announce cost-of-living measures on Thursday, but sources say no agreement has been reached. The government also plans to give regulators more power to tackle unfair price rises, including naming and shaming companies that inflate profits during crises.
