Supermarket bosses have urged the government to light a “bonfire” of legislation to help the sector act to tackle the threat of soaring food prices.
CEOs and other top brass from most of the major supermarkets – including Tesco boss Ken Murphy, Sainsbury’s CEO Simon Roberts and Morrisons chief Rami Baitiéh – met Chancellor Rachel Reeves and senior officials in Downing Street yesterday to discuss the response to the crisis.
Afterwards retail leaders praised the mood of ministers at the meeting. They said the talks had been “constructive and positive”, with sources saying the government was at pains not to be seen to be accusing the sector of profiteering from the crisis.
It is understood Reeves discussed panic-buying of petrol, with growing fears chaos at the pumps could lead to fuel shortages, especially of diesel.
“People are worried over the petrol forecourts situation,” a source told The Grocer. “At the moment we’re not seeing any food shortages, there is no impact in that respect.”
The source added: “This meeting was about establishing open channels with the government and it was positive, suggesting that it is very keen to work with the industry to tackle this situation and protect consumers from the impact on the suppy chain.”
It’s understood a return of the so-called industry war room, which was set up during the Covid pandemic and also ran in the early months of the conflict in Ukraine, is one option that might be looked at by ministers if the situation in the Middle East lasts longer than a few weeks.
However, the meeting presented the government with an immediate question over its legislative programme, with supermarkets calling for the Treasury to delay all legislation and regulations that will add costs and drive up food prices.
On the list of targets include the controversial plans to switch to a new nutrient profiling model. Defra and the DHSC have already turned down appeals from industry leaders to shelve this plan because of the huge costs it will bring by way of reformulation and lost advertising.
Another major target is the Employment Rights Act, which has already faced major opposition from retailers, with renewed calls for it to be scaled back.
Scaling back on plans to ramp up the extended producer responsibility packaging tax this year to include modulation, which will mean higher fees for packaging that is hard to recycle, is also being called for.
BRC chief executive Helen Dickinson said retailers wanted the government to agree to “pause what can be paused” and ensure that the implementation of regulation does not end up simply adding to family bills.
Dickinson said after the meeting: “Retailers had a constructive meeting with the Chancellor. Supermarkets are doing everything they can to keep food prices affordable and maintain the ongoing resilience of their supply chains.
”While the conflict in the Middle East means some inflation is inevitable, there are domestic policy levers that government can pull in order to mitigate some of the inflationary pressures. Industry is committed to working with government to consider these further and on ways it can continue to support British households.”
The call from supermarkets for action to prevents inflation comes after the FDF yesterday called for the government to intervene with emergency measures to help manufacturers facing a massive inflationary shock due to the war in Iran.
It warned food bills were now expected to soar by up to 10% by Christmas even if the Strait of Hormuz opens “within two to three weeks” and energy production in the Middle East returns to normal within a year.
Its previous prediction was for food inflation to fall to 3% by the end of the year.
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