The UK government is in discussions with major supermarkets about introducing a voluntary cap on the price of basic food items such as bread and milk, in an effort to alleviate the rising cost of living. Food prices rose by 19.1% in the year to April, the second highest rate in 45 years, according to official figures.
Downing Street sources have emphasised that there are no plans for a mandatory price cap. The proposal, first reported by the Daily Telegraph, is said to be at the 'drawing board stage'. Supermarkets would be allowed to select which items to cap and participate voluntarily, modelled on a similar agreement in France.
Health Secretary Steve Barclay told the BBC that the discussions are about 'constructive discussions with supermarkets' and involve 'no element of compulsion'. He added that the government aims to protect suppliers who face considerable pressures. However, Labour's shadow work and pensions secretary Jonathan Ashworth described the reports as 'extraordinary', comparing Prime Minister Rishi Sunak to former Prime Minister Edward Heath, who implemented price controls in the 1970s.
The British Retail Consortium (BRC) expressed doubt about the impact of a price cap. Andrew Opie, director of food and sustainability at the BRC, said it 'will not make a jot of difference to prices', arguing that high food prices are driven by soaring energy, transport, and labour costs. He urged the government to focus on cutting red tape instead of 'recreating 1970s-style price controls'.
Earlier this week, Sainsbury's boss Simon Roberts denied profiteering, stating his business was 'absolutely not' engaging in 'greedflation'. The Competition and Markets Authority is examining the grocery market. Chancellor Jeremy Hunt has stressed widespread concern about prices and agreed to engage with the industry on measures to ease household budget pressures.
