Britain’s Finance Ministry has put pressure on supermarkets to limit food prices amid inflation fears.<\/figcaption><\/figure>\n<\/div>\nBritain’s Finance Ministry is pressuring major supermarket groups to impose voluntary price caps on key products such as eggs, bread and milk in exchange for easing some rules, according to two people with knowledge of the situation.<\/p>\n
Confirming a Financial Times report that the ministry has proposed relaxing some new packaging rules and possibly delaying changes to healthy food rules in exchange for the price cap, the people said grocers have reacted angrily and are pushing back.<\/p>\n
British grocery inflation was 3.8% in the four weeks to April 19, according to Numerator researcher Worldpanel.<\/p>\n
The Bank of England said businesses it spoke to last month expect food price inflation to reach 6% to 7% later this year, reflecting the economic fallout from the Iran war.<\/p>\n
The British Retail Consortium, which represents Britain’s major supermarket groups including market leaders Tesco and Sainsbury’s, said it opposed the price cap.<\/p>\n
BRC CEO Helen Dickinson said, “Rather than imposing 1970s-style price controls and trying to force retailers to sell goods at a loss, the government should focus on how it can reduce the public policy costs that are driving up food prices.”<\/p>\n
The proposals come as Prime Minister Keir Starmer’s government seeks to address the ongoing cost of living crisis and follow a similar move by the Scottish National Party, which holds power in Scotland’s devolved parliament.<\/p>\n
\u201cIf that happened, no one would invest in the UK,\u201d one person said.<\/p>\n
\u201cIf you want food price inflation to decline, you have to start looking at the cost of regulation on business,\u201d he said, highlighting the government’s moves to raise employer taxes, raise the national minimum wage, introduce a new packaging levy and propose the reform of thousands of food lines.<\/p>\n<\/p><\/div>\n