Food price cap proposal ‘idiotic’ say supermarket bosses

It follows reports that the government has urged supermarkets to limit the price of products such as eggs, bread and milk in return for the lifting of some regulations.

A government minister denied plans for price caps but confirmed that it is holding talks with supermarkets amid concerns over rising inflation.

M&S boss Stuart Machin said he had “no direct communication” with the government about the reported proposals and called for ministers to ease regulation.

“It's completely preposterous,” he told reporters.

“I don't think the government should be trying to run business.

“My advice is that the government should reduce some of the tax and regulatory burden and free us up in a very competitive market.

“With food inflation at 3%, I think it actually demonstrates that food retailers are taking a big responsibility to try and minimise passing through prices.”

He stressed that the business is making a loss on the sale of a number of essential products, such as milk, bread and bananas.

Former Asda chairman Lord Stuart Rose branded a potential cap as “stuff and nonsense”.

He told BBC Radio 4's ‘Today’ programme: “"This smacks of state control.

“It is idiotic. It is dangerous and it will never work.”

Nevertheless, Treasury minister Dan Tomlinson said “this isn't something we're looking at” when asked if there had been conversations with supermarkets about bringing in price caps.

He told Sky News “The government is not looking at doing this.

“Instead, what we're doing is looking across the economy at what are the different ways that we can help households.”

But he later appeared to muddy the waters as he explicitly ruled out a “mandatory price cap” on supermarket essentials.

He told BBC Radio 4's ‘Today’ programme: “Of course, the government is going to be having conversations with supermarkets about what more we can do to support households, but no, we are not going to be implementing a mandatory price cap.”

It comes after Scotland's First Minister John Swinney pledged to cap the price of essential items.

Pressed on whether Treasury ministers would like a voluntary agreement with supermarkets to control prices, particularly on essential items, he said: “People are experiencing rises in prices, you know, particularly at the petrol pumps in recent weeks.

“It's right that the government looks across the board at what more we can do, both government levers, but also talking to industry about the steps that they could take to support people with the cost of living.”

Treasury minister Lord Livermore went further, telling the House of Lords the government will “never advocate” for price caps.

He told peers: “It's not for the government to tell supermarkets how to do their jobs.”

The Financial Times had reported that the Treasury had spoken to supermarkets about offering “incentives” which may include easing packaging policies and delay potentially costly changes to healthy food rules.