- By Vishara Sri Pasma, James Gregory
- BBC news
The government is discussing plans for supermarkets to introduce price caps on basic food items to combat the rising cost of living.
Voluntary deals with major retailers could result in lower prices on basic groceries such as bread and milk.
Downing Street officials stressed that they have no plans to mandate a price cap.
Supermarkets will be allowed to participate only voluntarily, with selected items to limit, in an initiative modeled after a similar agreement in France.
Health Secretary Steve Berkley told BBC One’s Sunday with Laura Kuensberg programme: “This is about having a constructive conversation about how we will work with supermarkets, and about the coercive element. not,” he said.
He added that the government is also keen to protect “suppliers who themselves face considerable pressure”.
For Labor, Shadow Work and Pensions Minister Jonathan Ashworth said on the show that the report was “unusual” and that “rishi snacks are now like a modern-day Edward Heath with price controls”. Told.
But there are some questions about what impact food price caps will have.
The UK retail consortium says the government should focus more on eliminating bureaucracy than “recreating 1970s-style price controls”.
“This doesn’t make a big difference in price. Higher food prices are a direct result of higher energy, transport and labor costs, and higher prices paid to food manufacturers and farmers,” said Andrew. Chief Opie says “Much of the cost of keeping inflation high at a time when commodity prices are falling now comes from the disruption of new government regulation. We should focus on removing bureaucracy.” So that resources can be devoted to keeping prices as low as possible. ”
Earlier this week, the president of Sainsbury’s denied that his supermarket was making a profit.
Simon Roberts said he would “never” raise prices to increase profits, known as “greedflation” in his business.
He told the BBC that Sainsbury’s and other grocery chains have invested in “fighting inflation” to avoid passing all the rising costs onto consumers.
The Competition and Markets Authority, the competition watchdog, said it would look into how the food market is operating.
At a meeting with food manufacturers last week, Prime Minister Jeremy Hunt stressed widespread price concerns and agreed to work with the industry on possible measures to ease the pressure on household budgets.
Mr Hunt said he would support raising interest rates if it would keep prices and inflation in check, even if it meant the UK was in danger of slipping into recession.
Shevaun Havilland, Executive Director of the British Chamber of Commerce, said: “Businesses don’t have price caps like consumers do, but some SMEs buy energy like consumers do, so they can stay in business. It’s very difficult to keep going,” he said on the show. .
Inflation can be calculated in many ways, but the main measure is the Consumer Price Index (CPI). It tracks the price of commodities in a fictitious “goods basket”.
The latest CPI for the year to April was 8.7%, down from 10.1% in March and 11.1% in October.
Inflation has not fallen as much as many expected, as some food prices have skyrocketed.
Experts warn that expensive food will overtake utility bills as the “epicenter” of the cost-of-living crisis.