First Minister John Swinney's proposal for a mandatory food price cap in Scotland is facing significant backlash from industry leaders who warn of potential negative consequences, including product shortages, increased costs for other goods, and damage to investment.
The plan, a flagship pledge in the Scottish National Party's (SNP) manifesto for the recent Holyrood election, would impose price ceilings on between 20 and 50 essential items such as milk, bread, chicken, and eggs. Swinney is expected to confirm next week whether legislation for the cap will be introduced.
David Thomson, chief executive of FDF Scotland, stated that price caps would not address the root causes of food inflation, such as rising energy, labor, commodity, and regulatory costs. He expressed concern that capping prices might shift costs elsewhere in the food system, potentially leading to higher prices for non-capped items and impacting availability, choice, and quality. For Scottish producers already operating in a high-cost environment, this could reduce investment and weaken long-term food security, potentially leading retailers to source products from lower-cost markets.
Industry bodies are also scrutinizing the proposal's compatibility with competition law and the UK Internal Market Act. "We have yet to see really what the Scottish Government intend this to operate in practice so we don’t know, but I would expect the Competition and Markets Authority to take a close look at any proposed legislation for potential issues relating to competition law and the UK Internal Market Act," Thomson added.
Michelle Ferguson, director of Confederation of British Industry Scotland, acknowledged the financial pressures on households but argued that retailers are already competing to keep prices low. She suggested that such price interventions risk distorting competition and adding complexity without tackling underlying cost pressures. Ferguson recommended that governments focus on reducing policy-driven costs across the food supply chain, such as energy, business rates, packaging, and regulatory expenses, to help retailers manage future price rises.
Scottish Labour leader Michael Marra also voiced his opposition to the policy, stating it is unlikely to be effective and could restrict product availability while increasing prices on other goods. Marra suggested the proposal may have been intended more for political controversy than practical implementation.
A Scottish Government spokesperson confirmed that a consultation on food price controls will be launched shortly, forming part of an engagement process with stakeholders including retailers, food producers, and farmers. The spokesperson noted that consideration of the UK Internal Market Act is integral to the policy development.