Reports that ministers are working with supermarkets to voluntarily cap the price of basic food items could have "unintended consequences" according to Stuart Rose, chairman of Asda.
Rose, who also ran Marks and Spencer and Ocado said "You can't interfere in the market."
“My view on this is quite simple. I’ve been involved in retail for 50 years, and there’s been all sorts of schemes being followed by all sorts of governments over time about what they think we should be doing to control the market," Rose added.
The veteran retail boss's comments come as Asda confirmed the acquisition of petrol and convenience store EG Group’s UK and Irish business in a deal worth £2.3bn, creating a “consumer champion like the UK has never seen.”
The government's supposed plans were slammed by Clive Black at Shore Capital.
“It looks like when it comes to food policy at least, there are no grownups around in 10 Downing Street or DEFRA,” he said.
The highly-respected retail analyst was scathing, saying the Prime Minister's interest in food price controls “beggars' belief” in terms of being two-faced (we want farmers to be paid more but shopper to pay less) amidst wider policy failure.
“No one in Whitehall, it seems, has the wit to look in the mirror and think how Government directly and indirectly contributes to inflation,” he added.
Black felt the UK Government should reflect on how its “frankly poor energy strategy, crazy immigration policies, poor education and skills delivery, and at times inappropriate legislation have contributed to the cost base of industry that must be collected back from the market if business is to survive.”
For the grocers, Black said the talk of potential price controls was frankly a “bizarre and depressing narrative,” the impact of which can have all sorts of wider ramifications through the supply chain whilst not doing anything to help with supply-side cost pressures, much of which comes from Government.
“Forked tongue, two-faced, whatever one calls it, the UK Government is just not doing it for business,” Black continued.
“The wider reputation of the UK as a place to invest is also not assisted by supply-side failure, poor administration and frankly, hair-brained policy ideas,” he added.