Scottish First Minister John Swinney is facing significant opposition from a broad coalition of industry bodies over his proposal to cap the prices of 20-50 essential supermarket items. Representatives from sectors including Scotland's salmon industry, baking, farming, drinks production, retail, and grocery have united to urge the government to abandon the plan, warning it could lead to adverse consequences for both consumers and producers.
The joint letter to Swinney, coordinated by the Scottish Retail Consortium and signed by 23 business organizations, asserts that a statutory food price cap is "unnecessary, ineffective, and likely to deliver significant adverse consequences." The signatories argue that such a cap would not address the root causes of elevated food prices, such as rising production, refrigeration, and distribution costs exacerbated by global events like the COVID-19 pandemic and conflicts in Ukraine and Iran, which have increased expenses for fertilizer, fuel, and energy. They also point to taxes on employment and packaging as contributing factors.
Industry representatives contend that the current competitive food retail market in Scotland already delivers affordable, high-quality food due to collaboration across the supply chain. They fear a price cap would disrupt this balance, potentially increasing the overall cost of household goods rather than decreasing it. The letter suggests that Scottish ministers should instead focus on tackling the underlying factors driving price increases and "signal Scottish Ministers recognise the growing cumulative regulatory burden on industry."
Among the signatories are leaders from the Food and Drink Federation Scotland, Scottish Salmon, the British Soft Drinks Association, DairyUK, the Scottish Seafood Association, Scottish Bakers, the National Farmers Union of Scotland, the British Poultry Association, and the British Sandwich and Food to Go Association. David Lonsdale, director of the Scottish Retail Consortium, described the intervention as a "a powerful intervention from a formidable alliance of representatives of Scottish industry, with an unequivocal message: scrap the cap."
The proposal, a key announcement in the SNP's manifesto for recent elections, is expected to be detailed further when the First Minister unveils his programme for government. A public consultation on the plan is also anticipated shortly. However, a food industry source indicated a lack of favorable discussion about the proposal among Scottish food and drink firms. Some reports suggest that junior minister Tom Arthur has been leading on the policy while higher-ranking officials view it as problematic.
Beyond the directly affected sectors, concerns have been raised about indirect impacts. Food and Drink Federation Scotland has warned that costs could be shifted elsewhere in the food system, potentially leading to higher prices for other products and impacting availability and choice. There are also fears that supermarkets might resort to cheaper foreign imports to meet price-capped product requirements, which could further disadvantage Scottish producers. Additionally, a former judge at the Competition Appeal Tribunal has cautioned that the proposed legislation might contravene competition and internal market acts.
A Scottish Government spokesperson stated that helping citizens with the cost of living is a top priority and that ministers have engaged with stakeholders on food price control proposals. The government plans to launch a consultation to gather further views.