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

John Swinney, Scotland’s first minister, is set to unveil his government programme on Tuesday, which includes a controversial proposal to impose a legal cap on the prices of certain staple foods such as milk, eggs, cheese and rice. More than twenty business organisations, representing retailers, manufacturers and distributors across the Scottish food sector, have jointly written to Swinney urging him to abandon the plan, arguing it would be ineffective and could even raise overall shopping costs. Signatories include the Scottish Retail Consortium, the Food and Drink Federation Scotland, Scottish Bakers and Dairy UK, and they contend that the cap would not tackle the underlying drivers of price inflation—rising production, refrigeration and distribution expenses. The groups warn that the statutory measure would merely shift costs elsewhere, offering a “false promise” to consumers.

The business coalition points to the experience of Hungary, where a similar price‑cap policy allegedly caused shelf shortages, a surge in cheap imports and strained relations between retailers and shoppers. They stress that Scotland already enjoys some of the most affordable food prices in western Europe, and that the current market model is preferable to a cap that could distort supply chains. Ewan MacDonald‑Russell, deputy head of the SRC, told BBC Radio Scotland that the proposal is “an appallingly terrible idea” and that the cost of administering the scheme would ultimately be absorbed by businesses, potentially inflating the overall cost of a shopping basket.

Implementing the cap would likely require amendments to the UK Internal Markets Act of 2020, which safeguards free trade across the United Kingdom post‑Brexit, meaning the Scottish government would need an exemption from Westminster—a step that has yet to be confirmed. Legal challenges from supermarkets could further delay or block the policy, and the legislative process itself could take up to a year. In response, the Scottish government has announced a summit with food producers and retailers for next week to explore alternative solutions, reaffirming that easing the cost of living remains a top priority while acknowledging the complexities and uncertainties surrounding the proposed price controls.

⚡ Effects Interpreter