Ministers have held talks with major supermarket chains urging them to limit price rises on staples such as milk, bread and eggs, but Westminster has ruled out imposing a mandatory cap.
Treasury secretary Dan Tomlinson confirmed discussions with the retail sector about “the steps that they can take to support people with the cost of living,” saying the government would not force retailers to cap prices. Sources told the BBC the Treasury asked supermarkets to voluntarily freeze increases on selected products in return for regulatory easements, including relaxed packaging rules and a possible delay to changes on healthy-food regulations. The proposals were first reported by the Financial Times.
The idea of a voluntary price freeze drew strong criticism from industry figures. Lord Rose, the former Marks & Spencer chief executive, called the proposal “the stuff of nonsense,” saying it “smacks of state control” and was “idiotic, dangerous and it’ll never work.” The British Retail Consortium (BRC) warned such measures would amount to “1970s style price controls” and could force retailers to sell goods at a loss. BRC chief executive Helen Dickinson stressed the UK’s grocery market is highly competitive and argued the government should tackle the public policy costs driving food price increases instead.
Retailers told the BBC they face rising costs from government policies such as increases in the national living wage and employers’ national insurance contributions, and from supply-chain pressures. Some in the industry also blamed higher fertiliser and animal feed prices after disruptions to shipping in the Strait of Hormuz linked to the conflict in the region.
Tomlinson, speaking on BBC Radio 4’s Today programme, reiterated there were no plans for a mandatory food price cap at Westminster. He said the government was looking at both its own levers and discussions with industry to help households amid concerns about inflation and international events affecting costs.
Newly published inflation data show food prices rose 3% year-on-year in April, slightly above the overall inflation rate of 2.8%. Some industry groups have warned food inflation could approach 10% by the end of the year if current pressures persist.
Alongside talks with retailers, the chancellor has moved to strengthen consumer protections against price gouging. The Competition and Markets Authority (CMA) will be given new powers to “name and shame” firms that change margins in response to economic shocks, and will receive rapid investigatory powers to identify businesses exploiting crises.
Chancellor Rachel Reeves said: “When global events drive up costs, working families feel it first. I will not tolerate anyone exploiting a crisis to make a quick buck off the back of hard working people.”
The row over grocery pricing follows plans by the Scottish National Party to introduce a mandatory price cap in Scotland. Ministers in Westminster say they prefer industry-led approaches and regulatory action rather than direct price controls, but talks with retailers and new CMA powers indicate continuing government focus on protecting consumers as costs rise.