Supermarket bosses and suppliers have called on the government to pause all but critical legislation in the sector for at least a year to enable the industry to weather the current bleak economic conditions.
The BRC has told ministers regulation including the proposed rollout of extended producer responsibility (EPR) – a flagship element of the government’s environmental plans for the industry – should be put on hold so supermarkets can focus on keeping prices down.
Giving evidence to the House of Commons Environment, Food & Rural Affairs Committee, BRC director of food Andrew Opie said the cost of living crisis was so extreme retailers should be devoting all their time and resources to helping people afford to feed their families.
“This is a crisis moment,” Opie said. “We have got people coming into our stores using self-service tills because they are embarrassed at the thought they might not have enough money at the checkouts and might have to put things back.
“That’s why the government needs to focus, just for a year or so, on helping supermarkets to do all they can to keep prices down.”
He added: “We would like a pause and prioritisation. We need to ask what is it that is necessary, that customers absolutely need in the next year, or that we need to deliver in terms of some of our major environmental goals? What could we pause and come back to when we get through this particularly difficult situation?
Plans that could be paused included “additional labelling around animal welfare, which the government is starting to look at now”, he said, along with EPR, due to come into force in 2024. “That is a multibillion expenditure for retailers and suppliers which will inevitably be passed on to customers in terms of higher prices,” he said of the latter.
“We are not against EPR in principle but the problem with the current system is it is completely flawed, and it will not create a circular economy like the government believes it will and it will simply burden us with huge costs.
“You need to pause this legislation and sit down with industry and design a scheme that will work and come back to it when we are ready to implement it.
“We have seen for example that the rollout of deposit return schemes in Scotland had to be put back a year. These are massive, complex schemes which require huge investments of resources. This is not the time to do them.
“We are saying pause, get it right and then come back.”
It comes with IGD this week predicting food inflation will hit nearly 20% early next year, while the committee was told suppliers were facing rising costs of 30%.
The BRC’s call for delays in regulation was backed by FDF head of strategy David Thomson, who said energy costs had soared to 22% of suppliers’ budgets, compared with 12% a year ago.
“We would agree very much with the BRC,” he said. “EPR for example is a scheme which has not been designed by industry and we would very much a agree with the idea of pulling that back and thinking again.
“At the moment we don’t think what will be proposed is fit for purpose. We are in unprecedented times and there are unprecedented costs for consumers, and this would add costs at the wrong time.”
Thomson also called for a pause on climate change agreements, which he said would reduce the number of businesses that would get benefit by 80%.
“Pause it for a couple of years and let’s design a better system,” Thomson said.
The Grocer revealed in July that former Defra secretary George Eustice had told the industry the government was willing to look again at the timing of policies such as EPR and the rollout of a deposit return scheme, predicted to cost businesses up to £2.5bn a year.
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