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The UK government is reportedly encouraging supermarkets to hold back on raising food prices in exchange for a relaxation of certain regulations, according to sources within the retail sector. This initiative is expected to be voluntary and would focus on essential grocery items such as eggs, bread, and milk.
According to information from retail insiders, the Treasury has approached supermarket chains with a proposal that would see them maintain current prices on select products. In return, these retailers could benefit from eased packaging requirements and a possible postponement of upcoming regulations related to healthy eating. However, not all retailers are in favor of this plan, with some expressing strong opposition. The Treasury has chosen not to provide a public comment on the matter.
The idea to limit food price increases follows similar steps taken by the Scottish National Party (SNP), which recently announced a mandatory price cap on groceries in Scotland. A retailer who was aware of the government’s plan described it as “crazy” and attributed it to a “desperate” government maneuver. Currently, food prices are climbing at a rate of 3.7%, slightly outpacing the overall inflation rate of 3.3% recorded in March.
Industry experts have raised concerns that food price inflation could reach nearly 10% by the end of this year. According to some retailers, recent government policies—such as hikes in the national living wage and employer national insurance contributions—have contributed to rising costs in the food supply chain. Others point to external factors like increased costs for fertiliser and animal feed, which have surged after the conflict involving the US, Israel, and Iran disrupted shipments through the crucial Strait of Hormuz
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