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Plans for supermarket price cap on basic food


Still Waters

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The government is discussing plans for supermarkets to introduce a cap on the price of basic food items to help tackle the rising cost of living.

A voluntary agreement with major retailers could see price reductions on basic food items like bread and milk.

Food prices rose by 19.1% in the year to April - its second highest rate in 45 years.

Downing Street sources have stressed that there are no plans for a mandatory price cap.

The idea of a cap or freeze on basic food items, as first reported by the Daily Telegraph, is said to be at the "drawing board stage".

Supermarkets are expected to be allowed to select which items they would cap and only take part in the initiative, modelled on a similar agreement in France, on a voluntary basis.

https://www.bbc.co.uk/news/uk-65736944

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Brexiters will be excited by this. It is a step back to the ration cards we had "when we won the war". They're also pleased by the border chaos-  they're hoping we can forget about holidaying in the Med and going back to family charabanc trips to Skegness and Bognor, or mystery bus trips to North Wales.  Who needs the Greek Islands when you can sit on a pebbly beach at Llandudno in the light drizzle, with your carrier bags of jam sandwiches and bottles of squash mum?

Britain is beginning to feel more like the home we all fondly remember from our childhoods with every week that passes!

Edited by pellinore
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  • 2 weeks later...

French shoppers should pay less for their food from next month, Finance Minister Bruno Le Maire said on Friday, after he secured a pledge from 75 top food companies including Unilever to cut prices on hundreds of products.

The companies, which together make 80% of what the French eat, could face financial sanctions if they don't follow through, Le Maire said.

The government is furious that supermarket prices have hit record levels in recent months even though the costs of many raw materials used by food producers have been declining.

https://www.msn.com/en-gb/money/other/france-strong-arms-big-food-companies-into-cutting-prices/ar-AA1clpeI?

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3 hours ago, Eldorado said:

French shoppers should pay less for their food from next month, Finance Minister Bruno Le Maire said on Friday, after he secured a pledge from 75 top food companies including Unilever to cut prices on hundreds of products.

The companies, which together make 80% of what the French eat, could face financial sanctions if they don't follow through, Le Maire said.

The government is furious that supermarket prices have hit record levels in recent months even though the costs of many raw materials used by food producers have been declining.

https://www.msn.com/en-gb/money/other/france-strong-arms-big-food-companies-into-cutting-prices/ar-AA1clpeI?

It might work in France, but there would be problems if tried in the UK. There are a number of reasons why caps don't work well in practice, despite sounding attractive. One problem is they lead to a lack of choice and availability of food. The UK is more vulnerable to this than countries in Europe, but the UK accepted higher prices and inflation as an acceptable price to pay to stop trading with the hated EU :

The danger with introducing price caps below current levels is that some suppliers are likely to drop out of the market and stop supplying. That’s because the capped prices no longer cover their costs. Thus, food price caps could lead to empty supermarket shelves.

Nonetheless, this part of the price increases is a choice. With or without Brexit, the UK could have avoided this problem by having a more liberal border policy, but it didn’t. The EU has erected similar trade barriers against the UK, but the UK is being hit harder because it relies on the EU more for imports than the other way around. This partly explains why UK inflation is the highest among G7 countries.

EU import border controls are also scheduled to get even tougher by the end of 2023. If an Italian supplier exports Parma ham to a German supermarket, there are no forms to fill at the border. If the Italian supplier exports that same ham to a British supermarket, they will have to pay a veterinary doctor to fill out forms declaring the meat to be safe, get those forms checked at the border, pay inspection charges and so on.

More EU suppliers are then likely to stop UK deliveries, or increase prices to offset the additional compliance costs. UK food prices would then rise further, which the government could avoid by loosening its own border checks.

Price caps on groceries are not the answer to the UK's inflation problem (theconversation.com)

Edited by pellinore
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On 5/28/2023 at 1:27 PM, Still Waters said:

The government is discussing plans for supermarkets to introduce a cap on the price of basic food items to help tackle the rising cost of living.

A voluntary agreement with major retailers could see price reductions on basic food items like bread and milk.

Food prices rose by 19.1% in the year to April - its second highest rate in 45 years.

Downing Street sources have stressed that there are no plans for a mandatory price cap.

The idea of a cap or freeze on basic food items, as first reported by the Daily Telegraph, is said to be at the "drawing board stage".

Supermarkets are expected to be allowed to select which items they would cap and only take part in the initiative, modelled on a similar agreement in France, on a voluntary basis.

https://www.bbc.co.uk/news/uk-65736944

Seeing as Germany just found out from the USA that it was Ukraine who put holes into the Nord Stream pipeline and that the Poles are suspected of helping them, then a split is coming. At the minimum it will be a major diplomatic incident between Germany and Poland with loss of war support. 

Sanctions may end sooner than we think with a return to normal prices.

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British Prime Minister Rishi Sunak has abandoned plans to ask supermarkets to impose a voluntary price cap on basic goods after a backlash from retailers, the Telegraph reported on Wednesday.

MSN

 

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