Hunt to discuss curbing rampant food inflation with manufacturers
Jeremy Hunt will ask food manufacturers to do what they can to support consumers amid skyrocketing food prices.
The Chancellor will meet with representatives from the industry on Tuesday to raise concerns over rampant food inflation, according to the Treasury.
It comes amid warnings that food prices are set to overtake energy bills as the “epicentre” of the cost-of-living crisis.
The Resolution Foundation said on Friday that food prices would continue to rise even as energy costs are set to fall, having already increased by 19.1% in the year to March.
The think tank warned rising food prices would force low-income households to eat less, as they spend more of their income on food and even own-brand essentials are becoming unaffordable for some.
Meanwhile, analysis by Which? of April prices found that some meat, yoghurt and vegetables were among items that have doubled in price compared to a year ago.
Mr Hunt said: “High food prices are proving stubborn so we need to understand what’s driving that.
“That’s why I’m asking industry to work with us as we halve inflation, to help ease the pressure on household budgets.”
Karen Betts, chief executive of the Food and Drink Federation, noted that drivers of food price inflation “have been both persistent and broad-based – from ingredients to energy and labour – making price rises unavoidable” in recent months.
She said: “We believe food and drink price inflation is close to its peak, and food and drink manufacturers will continue to work hard to keep prices as low as possible, conscious of the pressure on hard-pressed households.
“Government can help too, for example by urgently reviewing upcoming packaging recycling regulations to make them more efficient, by working with us to address labour and skills shortages, and by keeping to a minimum the labelling changes required of companies as a result of the recent agreement with the EU on the movement of food and drink to Northern Ireland.”
The Chancellor will also meet with the competition watchdog to discuss its investigation into whether any failure in competition is leaving consumers paying higher grocery and fuel prices than they should be.
The Competition and Markets Authority (CMA) last week said it had not seen evidence pointing to specific competition concerns in the grocery sector “at this stage”, but it was “important to be sure that weak competition is not adding to the problems”.
It will provide an update on its work over the coming months.
We're taking action to help contain rising cost of living pressures in #fuel and #grocery markets.https://t.co/8DJrZoIhmm
Read our thread⬇️ pic.twitter.com/OQtAPfczUO
— Competition & Markets Authority (@CMAgovUK) May 15, 2023
The watchdog also announced an update on the Road Fuel market study it began last year, saying that indications were that higher pump prices could not be attributed solely to factors outside the control of the retailers and “appear in part to reflect some weakening of competition in the road fuel retail market”.
The CMA is also scrutinising supermarket unit pricing to ensure retailers are sticking to rules that help consumers accurately compare products and choose the best value for money.
The Government will consider updating pricing rules, including by strengthening the Price Marking Order 2004 once the CMA review has concluded, the Treasury said.
The legislation governing the display of prices of goods specifies a range of different units that can be used depending on the product type, which can result in confusion for shoppers.