The UK Treasury is in discussions with major supermarkets about incentivising them to voluntarily freeze the prices of essential goods such as eggs, bread and milk. The move comes as the Iran war continues to drive up food prices and the cost of living for millions of British households. The approach differs from Scotland, where the SNP has announced plans for compulsory price controls on similar staple items.
Under the Treasury proposal, supermarkets that agree to voluntarily cap prices on basic staples would in exchange receive relief from upcoming regulations on supermarket packaging and healthy food requirements. Both of these regulations were set to become a source of revenue for the Treasury but would have imposed significant costs on the retail industry.
However, industry analysts have raised questions about how effective the measure would be in practice. Milk, eggs and bread are already among the most competitively priced products in British supermarkets, with the UK having some of the cheapest food prices in Europe. Farmers consistently complain they are not paid fairly for producing these products, and supermarkets operate on very thin margins for basics, making their profits on other higher-margin goods.
Supermarkets have reportedly reacted furiously to the proposals, according to the Financial Times, pointing out that profit margins on essential goods are already extremely low. The price of a standard four pints of milk is already uniform across most major chains as it serves as a loss leader to attract customers. Critics have called the approach desperate, arguing that loosening health and packaging targets in exchange for minimal price relief represents a poor trade-off for public health outcomes.