Supermarket bosses and City analysts have attacked government proposals for voluntary price caps on basic food items to help ease pressure on households from a potential new cost of living crisis.
Marks and Spencer Group PLC (LSE:MKS) chief executive Stuart Machin called the idea “completely preposterous”, while veteran retail analyst Clive Black of Shore Capital deemed it “madness".
The plans, first raised by Treasury officials with supermarkets this week, would see retailers agree to offer at least one low-cost version of staples such as bread, milk and butter in exchange for looser regulation in areas including packaging and healthy food rules.
Machin said ministers should instead focus on lowering taxes and cutting regulation, saying "they should try to understand business better".
The M&S boss added that the retailer already lost money on some essentials, including milk, bread and baked beans, while making only slim margins on products such as eggs and sugar.
Black, head of research at Shore Cap, warned the proposals risked unsettling investors and further damaging confidence in Britain’s food sector.
He accused the government of “losing its mind in an orgy of neo-Soviet policy ideas” that could deter international capital from investing in UK retail.
He also argued the government itself had been a major driver of food inflation through costs for businesses, such as higher national insurance costs, minimum wage increases and other regulations such as levies on recycling of plastic packaging.
He also warned that any attempt to coordinate voluntary supermarket pricing could attract scrutiny from competition regulators, calling the idea “a morass of complexity and indirect consequences”.
Black said British people "do not pay enough for their food", adding that politicians "do not realise what it takes to produce food at scale with an economic return and comply with what society demands, be that on properly paying workers, kindness to animals, biodiversity, and wider, necessary, sustainability aspirations on air quality, carbon and water cleanliness, amongst many other things.
"If society demands such things, not unreasonably, plus secure supplies of wholesome and safe food, then it is more likely than not in forthcoming years to be paying more still, not less, for its food.
"Such ignorance and dishonesty on behalf of government is a major problem not just for the UK food system but the whole economy."