Business groups urge Swinney to scrap 'ineffective' food price cap plan

Business groups in Scotland have urged First Minister John Swinney to abandon his proposed food price cap scheme, claiming it is ineffective and a misguided approach to tackling rising food costs. The Scottish Retail Consortium, Food and Drink Federation Scotland, Scottish Bakers and Dairy UK, along with 22 other organizations, have penned a joint letter to Swinney, urging him to abandon the scheme.

Swinney's 100-day plan aimed to cap food and drink prices, particularly for essentials like milk, eggs, cheese, and rice, to ease the cost of living. However, the business groups argue that a statutory cap would not address the root causes of high food prices, such as increased production, refrigeration, and distribution costs. They assert that price caps are merely a gimmick and do not solve the issue, instead shifting costs to other areas.

A prominent example cited is Hungary, where a price cap policy led to shortages and tensions between retailers and customers. The business groups contend that the current system already provides the most affordable food prices in Western Europe and that a cap would not only be ineffective but could also make the overall cost of shopping higher due to the additional financial burden on businesses.

The Scottish government maintains that helping people with the cost of living is a top priority and has invited stakeholder input on the proposal. Swinney hopes to demonstrate his commitment to addressing the rising cost of living, but he may face challenges in implementing the cap due to the need for legislative changes, potential court challenges from supermarkets, and the need for a UK government exemption from the Internal Markets Act.