10 Downing Street

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PM Rishi Sunak has called a meeting at Downing Street to discuss food prices

A leading analyst has accused politicians of talking “dangerous nonsense” in claims of supermarket profiteering ahead of tomorrow’s crunch food inflation summit

The meeting at Downing Street, called by prime minister Rishi Sunak, aims to address fears over soaring food prices, with supermarket CEOs said to be prepared for long talks.

However, Clive Black of Shore Capital claimed politicians from different sides had irresponsibly stoked up anger against retailers, with unfair claims about their role in driving up prices.

Going into the summit tensions are running high between farmers and retailers, with organisations including the NFU calling for measures to rebalance the food system in favour of producers.

But Black accused MPs, including Liberal Democrat leader Ed Davey who has called for a CMA investigation into supermarket “profiteering”, of “speaking with forked tongues”.

At the weekend the BRC promised food prices would start to fall over the next few months, after Bank of England governor Andrew Bailey said they were largely responsible for driving inflation.

On Thursday, the bank was forced to raised interest rates for the 12th consecutive time.

Food inflation

“British politicians of all hues are right to be concerned about high current UK food inflation and its regressive features on the poor,” said Black .

“However, the UK food system is much more than supermarkets, including the public sector, and those same politicians ignore their role in elevated prices and diminished food security.

“It would be helpful to have grown-ups in the room.”

Black said politicians had conveniently ignored factors such as the war in Ukraine, and the fact that the UK had one of the most advanced supermarket systems in the world, with household food expenditure in recent years a fraction of what it used to be.

He said accusations of profiteering were “misinformed, ignorant and kneejerk”.

“Some commentators, such as the leader of the Liberal Democrats, have peddled inaccuracies to make cheap political points that damage the reputation of the UK to do business.

“To suggest that UK supermarkets rip folks off and earn supernormal profits is not only incorrect, it is insane.”

Regulatory burden

Meanwhile, FDF CEO Karen Betts said tomorrow’s summit was an opportunity for the government to “take the heat” out of inflation by reducing the regulatory burden on the industry.

Along with the BRC, the federation is calling on ministers to use the summit as an opportunity to scrap its current plans for Extended Producer Responsibility (EPR) on packaging, which it said was one of a number of government measures hampered by lack of joined-up thinking.

“We want the summit to forge a better partnership between government and our sector, not least to address the highest food and drink price inflation in 45 years,” said Betts.

“Government must focus too on how regulation is contributing to food and drink price inflation. Some regulation is actually inflating costs, not driving them down, where the same outcomes could be delivered in more effective and less costly ways.

“A lack of join-up between government departments, and a lack of clarity in government teams developing regulation and post-Brexit trading rules, is forcing cost and complexity onto our businesses.

“Critical changes must be made to plans for EPR so it prompts vital reforms to drive up the UK’s low recycling rates. Defra’s plans are simply to tax businesses more without assurances on what this extra money will achieve. The impact of EPR and other regulation will cause food and drink price inflation to persist longer than it needs to.

“Government needs to be laser-focused on good regulation and driving competitiveness and growth. If they aren’t, shoppers will pay the price in the weekly shop.”