Marks and Spencer, alongside other major supermarkets, has pushed back against government proposals to voluntarily cap the prices of essential items such as milk, bread, and eggs. The Treasury had suggested that retailers freeze prices on certain staple goods in exchange for easing packaging regulations and delaying changes to healthy food rules.
CEO Calls Proposal 'Preposterous'
M&S chief executive Stuart Machin described the scheme as 'completely preposterous', expressing strong frustration at the idea. The proposal, first reported by the Financial Times, follows a pledge by the Scottish National Party (SNP) last month, though in Scotland the cap would be mandatory rather than voluntary.
Treasury Defends Move
Treasury secretary Dan Tomlinson confirmed that talks had taken place with the sector 'about the steps that they can take to support people with the cost of living', but stressed that supermarkets would not be forced to cap prices. He argued the move aims to help households amid rising costs linked to the conflict in Iran, which has created concerns over surging prices.
'It's right that the government looks across the board at what more we can do - both government levers but also talking to industry about the steps that they can take to support people with the cost of living,' Tomlinson said.
Industry Backlash
The proposal has drawn sharp criticism from supermarket leaders. Former Sainsbury's boss Justin King labelled the plans 'pretty silly', warning they could lead to 'all sorts of competition law issues'. He also called it 'hypocritical' for the Treasury to ask retailers to freeze prices while its own policies add to inflation.
'If the government holds back on some of the things it's increasing... that will quickly flow through [to consumers],' King added.
Lord Stuart Rose, former chairman of Ocado and a Conservative peer, was equally dismissive: 'I think the whole idea is the stuff of nonsense and it will never fly. This smacks of state control, it's idiotic, it's dangerous, and it'll never work.' He emphasised that 'there is no better system than a free market economy' and warned of 'unintended consequences' should the government intervene in pricing.
Retail Body Weighs In
Helen Dickinson, chief executive of the British Retail Consortium, said: 'Rather than introduce 1970s style price controls and trying to force retailers to sell goods at a loss, the government must focus on how it will reduce the public policy costs which are pushing up food prices in the first place.'
Figures show that the annual rate of food price rises was 3 per cent in April, above the overall inflation rate of 2.8 per cent. Experts have warned that food prices could see a 10 per cent hike by the end of the year.
Machin argued: 'My advice is that the Government should reduce some of the tax and regulatory burden and free us up in a very competitive market.'
