The British Retail Consortium has dismissed recent news that the Government may introduce a price cap on basic food items. Health Secretary, Steve Barclay, has had constructive discussions with supermarkets in his recent Farm to Fork Summit. However, Director of food and sustainability at The British Retail Consortium, Andrew Opie, warns that this move will not decrease prices as high food prices are a direct result of soaring costs of energy, transport, and labor, as well as higher prices paid to food manufacturers and farmers.
Opie further explains that although commodity prices are dropping, the new regulations arising from the government are keeping inflation high. The proposed plans are reportedly at a “drawing board stage” and the scheme, should it be introduced, would follow the French model. Supermarkets would be able to choose which items to cap or freeze.
While some may suggest that Sainsbury’s is making excessive profit from high inflation rates, the company’s boss, Simon King, has dismissed this claim, emphasizing that they avoid passing all rising costs onto consumers. Asda follows a similar belief where Stuart Rose, the company’s chairman, explains that major retailers are already competing heavily with each other to provide the best value to their customers.
It is important to note that manipulating or attempting to control markets will have unintended consequences. Therefore, supermarkets should be careful about their wishes and actions. Nonetheless, the government’s proposal is still in its infancy and has yet to be thoroughly considered.