UK supermarkets urged to consider voluntary price caps on essential foods

UK supermarkets have been asked by the government to consider putting a price freeze on some essential foodstuffs to protect the public from inflation fuelled by the Middle East conflict.

Retailers rejected the plan, criticising its potential costs amid rising taxes, fuel and energy costs and arguing it could push up prices for shoppers overall.

One supermarket executive called the idea “completely mad”. Another said: “This is an unnecessary, unwanted and unjustified intervention in the market.”

The measure comes after the Scottish National party pledged to use its devolved public health powers to fix prices on 20 to 50 items such as bread, milk, cheese, eggs, rice and chicken because their rising cost was “impacting our nation’s nutrition”.

Helen Dickinson, the chief executive of the British Retail Consortium trade body which represents all the big supermarkets, said: “The UK has the most affordable grocery prices in western Europe thanks to the fierce competition between supermarkets.

“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.”

Another well-placed supermarket source said retailers had not been formally asked to control prices but a plan had been discussed for them to stock at least one version of basic items such as bread, milk and butter at a set low price.

One said: “There has been lots of chat. I don’t think they have got far on the potential scope [of controls]. The idea is we would have to provide, say, butter at a price and make sure that is available at all times.”

The source said that ensuring such availability could lead to branded or other more expensive lines having to be discounted to the set price, if cheaper varieties ran out.

“The cost of doing something like this is huge,” the source said. “It would be a huge amount of work as we don’t sell every [version of a product] in every store.”

One of the retail executives argued the government should focus on reducing “cost headwinds”, as a prize freeze would not “deliver the outcome they want”.

The source said the plan might depress prices on the 20 or so items covered but this was likely to have “unintended consequences on items they might not consider essential but might be for some families” as businesses sought to recover lost profits elsewhere.

The potential move comes after the chancellor, Rachel Reeves, met supermarket bosses last month to discuss concerns rise about the potential impact on the cost of living – including higher food prices – as a result of the Middle East conflict.