UK Supermarkets Reject Government Push for Voluntary Grocery Price Freeze

BBC Business reported Wednesday that senior UK supermarket executives have fired back at government pressure to voluntarily hold down prices on staple foods including milk, bread and eggs.

Ministers Confirm Talks but Rule Out Compulsion

Treasury Secretary Dan Tomlinson told BBC Radio 4’s Today programme that discussions with major retailers had taken place. The government wanted to explore steps the industry could take to ease cost-of-living pressures. However, Tomlinson was explicit that Westminster would not impose mandatory price controls. Officials had reportedly floated the idea of a voluntary price freeze in exchange for regulatory concessions. Those included relaxed packaging rules and a potential delay to restrictions on healthy food promotions.

Industry Reacts With Fury

The retail sector’s response was swift and pointed. Marks and Spencer chief executive Stuart Machin called any government move to cap food prices “completely preposterous.” He argued the government should instead cut the tax and regulatory load on businesses operating in an already competitive market. Former Ocado chairman Lord Stuart Rose told the same programme the proposal was “the stuff of nonsense” and warned of state-control implications. Former Sainsbury’s chief executive Justin King said the plan was “pretty silly” and raised concerns about potential competition law complications. He also called it “hypocritical” for the Treasury to urge price restraint while its own policies were adding to inflationary pressures.

Background: Rising Costs and a Scottish Precedent

Food inflation in the UK ran at 3% annually in April, outpacing the broader inflation rate of 2.8%. Some industry bodies have warned food prices could rise by nearly 10% before year-end. Part of the pressure stems from disrupted fertiliser and animal feed supply routes after conflict involving the US, Israel and Iran effectively restricted traffic through the Strait of Hormuz. The SNP had already pledged a similar but mandatory grocery price cap in Scotland, adding political momentum to the Westminster debate.

CMA Gets New Powers Against Price Gouging

Separately, Chancellor Rachel Reeves announced plans to expand the Competition and Markets Authority’s enforcement toolkit. The regulator will gain authority to publicly name firms that widened their margins during economic shocks. It will also receive faster investigatory powers to identify businesses exploiting crises. The British Retail Consortium’s chief executive Helen Dickinson argued price controls echoed failed 1970s-era policies and urged the government to address the public-policy costs driving food prices higher in the first place.

Read Next: What the UK’s Inflation Dip Means for Rate Cut Bets