Supermarket chiefs slam ‘idiotic’ necessities worth cap as Labour urged to approve plan
Grocery bigwigs have branded reports of price caps on essential food ‘idiotic’ but others say action is needed to help millions of cost of living hammered households
Many people are left with a bill shock after the weekly shop
Supermarket chiefs have slammed reports they could be asked to freeze the cost of essentials to help cost of living hammered households.
The Treasury has, it is claimed, spoken to supermarkets about limiting the price of up to 50 products, including milk, eggs and bread, in exchange for removing other regulatory costs. Stuart Machin, boss of Marks & Spencer, said: “We have had no direct communication about this, it is just what I have read, but it is completely preposterous. I don’t think the government should be running business, it should be trying to encourage better business.”
Mr Machin pointed to fresh data on inflation for April which showed the rate at which food prices rise eased to 3%. And he claimed M&S made a loss, or very thin profit margin, on many of the items muted to be included in any price cap.
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He said the price it charged for a pint of milk had remained at 85p for the past couple of years: “We don’t make money on milk. It is about minus 7%.” He said its 75p loaf of bread was also sold at a loss.
Other former industry bigwigs were equally scathing about the reported idea. Stuart Rose, who was not only a former boss of M&S but also ex-chairman of Asda, branded it “stuff of nonsense”. The Tory peer went on: “This smacks of state control. It is idiotic, it is dangerous, and it will never work. Who is going to pay the bill? Who decides what products? It is absolute nonsense.”
However, economist James Meadway, co-director of the think tank Verdant, said: “Price controls are a necessary step in addressing the crisis and controls are being successfully applied in a growing number of developed countries like Greece’s ‘household basket’ system for essential foods. Major supermarkets like Tesco are already making higher profits and have the capacity to manage prices of essentials in the public interest. If they will not do this voluntarily then the government should of course use legal measures as needed.”
Devika Dutt, economist at the University of King’s College London, said: “Price caps are effective tools to control the rise in price of essentials. It will have a bigger, and more consistent impact on cost of living than what is captured in inflation data.
“We already have an energy price cap in practice in this country that has moderated the impact of rising energy prices on households. This will provide the most relief to the poorest households that spend a larger proportion of their incomes on food, which would be quite welcome.”
And Conor O’Shea, campaign Coordinator at Cost of Living Action, said: “The government is right to be looking at price caps on food, and noises that they were investigating similar on rent is also welcome. We are living through an unprecedented cost of living crisis where bills are crippling families. Implementing fairer pricing must be a key pillar of the government response to this.
“Our research showed that four in five people think the government is doing badly at tackling the cost of living. It is crystal clear that the government needs to change its approach and address the structural drivers of this crisis, as well as providing immediate support.”
