Retail bosses have called for ministers to act “before the window closes” to prevent a wave of food price inflation caused by the war in Iran.
The BRC today warned that more than a month had gone by since Chancellor Rachel Reeves met supermarket bosses for crunch talks, but that government had failed to deliver any meaningful support to help keep prices down.
It comes as an opinion poll conducted for the consortium showed huge concern over a possible surge in food prices. Eighty per cent of respondents to a poll by Opinium of 2,000 UK adults said they were either very concerned or fairly concerned that war in the Middle East would lead to a spike in inflation.
Retail bosses from companies including Tesco, Sainsbury’s and Morrisons met with Reeves on 1 April to discuss a government response to the crisis to keep food prices down.
They called for action including removing non-commodity energy costs from retailers, which they argued could slash typical business energy bills by up to 65%.
As the crisis in the Strait of Hormuz continues, the BRC is also stepping up calls made by the supermarket bosses for the government to delay the introduction of the 2018 nutrient profiling model, which is set to be introduced by health secretary Wes Streeting. The BRC says this would impose huge reformulation costs and lost income on the industry just as the financial crisis hits.
It also wants a review of the extended producer responsibility tax, the plastic packaging tax and the Packaging Recovery Notes system. It argues these together are costing retailers more than £2bn a year.
The BRC claims no other country across Europe is facing such simultaneous new costs alongside the threat of rising inflation.
Last week, the government announced it would remove tariffs from a raft of food imports in a bid to help the industry tackle the threat of inflation.
Products including pasta, juices, tuna, oranges, peaches and other staples of the weekly shop are being targeted in measures beginning today.
Retailers warned the moves went nowhere near far enough and urged ministers to concentrate on tackling energy costs, which they said would have a much greater impact.
“The Middle East conflict is driving up costs across the supply chain and families are right to be concerned,” said BRC chief executive Helen Dickinson.
“But not every pressure bearing down on retailers comes from the Gulf. Higher National Insurance, packaging levies, new regulations and business energy charges are all domestic policy decisions, made in Westminster, and they can be addressed there. Such action by government would help retailers to keep prices affordable for households.
“Other governments are already acting. Germany has reduced electricity costs for businesses by moving levies off bills and EU leaders are actively discussing similar responses to this crisis. The UK should be moving in the same direction, not treating global instability as cover for inaction on costs of its own making.
“Retailers are working hard to hold prices down, but they cannot do it alone. Every cost government chooses not to address is a cost that will find its way into someone’s shopping basket. That is a political choice, and it is one ministers still have time to change – but the window to act is closing.”
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