It was Ted Heath’s government that introduced the first price freezes in November 1972. As The Grocer reported at the time: “watchdog officials were set up to man ‘dial a fiddle’ phones in Whitehall, a minister of food prices was appointed, and the nation was called on to rush around trying to catch out shopkeepers.” And even though the so-called Price Commission continued under the 1974 Labour government, it was a dead duck long before Margaret Thatcher abolished price controls in 1979.
In contrast, while there has been considerable commotion, the government’s exploration of a similar price cap plan this week was run back down the flagpole even faster than it was unfurled. Yet it still beggars belief that the Chancellor so little appreciates how competitive the sector is. When the CEO of Lidl is telling you in Downing Street meetings (as he has) that UK grocery is still the most competitive in Europe (despite Brexit), with prices 7% cheaper on average, that should surely provide some reassurance. Yet Reeves continues to refer to ‘price gouging’ and ‘profiteering’ within the sector, and appears no more informed than the ordinary punter on the low profit margins in supermarkets, their support for often loss-leading value lines, not to mention their social impact initiatives, including cash handouts and healthy food giveaways.
The fun and games over price caps isn’t over, either. SNP leader John Swinney had the nerve to call Whitehall’s plans “a complete mess” while insisting that its own plans for a mandatory scheme would go ahead in Scotland. And he was completely incapable of outlining how the plans would work. The detail – what the products would be, how many, in which retailers and how it would be policed – is still on the drawing board, he explained. And that’s where it should remain.
It’s not just politicians telling supermarkets what their price files should look like, however. This week the British Nutrition Foundation published a report suggesting that healthier lines need to be cheaper than unhealthy ones. This feels like a more joined-up approach, but as so often the god will be in the detail if policy and competition are to work together.
No comments yet