MPs Could Grill Supermarket Bosses Over Soaring Food Prices
Prices of supermarket staples have increased dramatically (Alamy)
4 min read
Chair of the environment, food, and rural affairs (EFRA) committee is considering a proposal to summon supermarket bosses to parliament as food prices reach a 45 year high.
According to recent Office for National Statistics (ONS) figures, food and drink items saw on average a 19 per cent increase for the year to March 2023 – despite the wholesale prices of staples like wheat falling over the last 12 months.
Chair of the cross-party committee of MPs, Sir Robert Goodwill, told PoliticsHome they are considering investigating the issue of food inflation and commissioning a report due to the cost of kitchen staples continuing to increase despite a drop in the price of many core ingredients.
“We are actively looking at doing a report on fairness in the food supply chain and talking to the supermarkets to see if it is a case of them exploiting their very dominant position – we're looking at five or six big players,” Goodwill said.
“It does seem that the normal competitive way that markets would work doesn't seem to be working as responsively as you would expect.”
Food inflation is significantly higher than consumer price index (CPI) inflation which hit 10.1 per cent in the 12 months to March, according to the ONS.
The average price of bread has increased by 29 per cent from £1.07 to £1.38, with the average price of olive oil increasing from 49 per cent from £3.87 to £5.78.
Hard cheese has seen a steep increase, up on average 44% from £6.92 to £9.98 – with sugar increasing 42 per cent from 73p to £1.04.
Goodwill added that a code of practice could be explored by the government to tackle record prices in essentials.
“We’ve got a thing called the grocery supply code of practice and the groceries code adjudicator, but that only looks at supermarkets' direct suppliers,” he continued.
“Maybe we need to widen the role of that to look at the way that supermarkets bear down on the suppliers to the supermarkets, then deal with the farmers.”
He added: “We do seem to have a situation which I think we're justified in asking the question: 'is this sort of what's been termed ‘greedflation’?' – where if you're going to put the prices up, we'll put them up quite a lot?”
In April, trade union Unite accused supermarket giant Tesco of "excessive profiteering" after £704 million was paid in dividends to shareholders in 2021/22, also claiming its research shows profit margins at UK supermarkets increased 89 per cent since 2019.
Chief executive of the Food Foundation charity, Anna Taylor, told PoliticsHome food pricing was “opaque” and that it is “really important that the government is asking the questions" as people feel the impact of the cost of living crisis.
“The government can, and the select committee should, be asking those questions – because the impacts of the rising food prices are so dramatic on families," Taylor said.
"We're really, really concerned about their impact on the health of children – because of the knock on effect that it has on their diet, the levels of stress at home [is] immense, they're struggling, families struggling to put food on the table.
“And that obviously has knock-on impacts on children's wellbeing so all the questions should be being asked, for sure."
Liberal Democrat leader Ed Davey has called for the Competition and Markets Authority (CMA) to look into whether profiteering was taking place at supermarkets.
“We need to bring soaring food prices back under control and offer relief to families," said Davey.
"That means cracking down on profiteering by food multinationals and the big supermarkets so customers get a fair deal."
However Karen Betts, Chief Executive of the Food and Drink Federation told PoliticsHome that the price of food and drink “remains stubbornly high because it takes some months for the rising prices that manufacturers pay to produce food and drink to filter through into the prices that shoppers pay on high streets and in supermarkets.”
“Food and drink manufacturers know we have a responsibility to keep the price of everyday products affordable, and ONS data shows that over 80% are absorbing a proportion of rising input costs in order to shield shoppers from the full price rise,” Betts said.
“This is having an impact on business margins and the resilience of our sector.”
A spokesperson for Sainsbury's also told PoliticsHome that supporting their customers during the cost of living crisis remains "their number one priority".
"Supporting our customers, colleagues and suppliers is the right thing to do and our profits and margin are down year-on-year as a result of the significant investments we have made to navigate inflation," they said.
A spokesperson for the department of trade said: “Retail food prices are set by individual businesses and are influenced by market competition – it is not for the government to set prices or comment on commercial decisions.
“We understand the pressure rising prices place on households. That’s why we’re providing cost-of-living support worth an extra £3,300 per household, and are on track to halve inflation this year.”
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