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The UK government ‘must focus on how it will reduce the public policy costs which are pushing up food prices’, the British Retail Consortium has said after reports the Treasury asked supermarkets to limit food prices in return for the lifting of some regulations. The proposals would see shops voluntarily cap the prices of essential groceries such as eggs, bread and milk, according to the Financial Times. The Treasury has said it would in return offer supermarkets ‘incentives’ which may include easing packaging policies and delay potentially costly changes to healthy food rules, the newspaper said. Helen Dickinson, the chief executive of the BRC, the leading trade association for retailers, said: ‘Rather than introduce 1970s style price controls and trying to force retailers to sell goods at a loss, the government must focus on how it will reduce the public policy costs which are pushing up food prices in the first place.’ She added: ‘The challenge facing retailers is a combination of higher energy and commodity costs resulting from the Middle East conflict, and the soaring cost of the government’s domestic policies.’ ‘The UK has the most affordable grocery prices in Western Europe thanks to the fierce competition between supermarkets,’ she also said. A spokesperson for the Treasury said: ‘The chancellor has been clear we want to do more to help keep costs down for families, and will set out more detail in due course.’ The Treasury asked supermarkets for guarantees that British farmers would not lose income from price caps, according to the FT. Some measures, including the packaging regulations, generate revenue for the Treasury, it reported. The government has also recommended supermarkets reinvest the savings from the regulation changes to freeze grocery prices, it added. This comes after UK food inflation accelerated to 3.7% in April. The foreign secretary on Tuesday told an aid summit of the risk of ‘sleepwalking into a global food crisis’ as a result of Iran’s blockade of the Strait of Hormuz. Chancellor Rachel Reeves is to set out measures to help households with the cost of living on Thursday. Writing in The Times, she said she had made decisions which were ‘responsible in the national interest’. ‘I will not tolerate anyone exploiting a crisis to make a quick buck off the back of hardworking people,’ the chancellor wrote. ‘I am clamping down on price gouging, giving regulators new, focused investigatory powers. Where regulators identify concerning practices, they will be encouraged to name and shame.’ In early trade in London on Wednesday morning, Tesco PLC was down 3.1%, while J Sainsbury PLC fell 2.1%. By market share, they are the two largest UK grocers. By Pol Allingham, Press Association source: PA Copyright 2026 Alliance News Ltd. All Rights Reserved.
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