With food price inflation running at record levels, it was announced today that MPs will investigate how profitability and risks are being shared through the food supply chain. The impact of external factors on the supply chain, such as imported food and global commodity prices, will also be examined.
The move comes amid claims that some retailers and manufacturers are profiteering during the inflation crisis, although this has been denied, with some taking a hit to profits as they absorb higher costs.
The cross-party Environment, Food and Rural Affairs (EFRA) Committee stated that it would look at issues throughout the food supply chain from ‘farm to fork’, taking evidence from farmers, manufacturers, retailers, consumers and the government.
The Chair of the EFRA Committee, Sir Robert Goodwill MP, commented: “During these times of high food price inflation, when many people are struggling to give their families good food at a reasonable price, it’s our job as a committee to get to the bottom of what’s going on.
“We know that consumers are paying higher prices, but the question is – are the other parts of the supply chain unduly benefitting from that, or are some of them also feeling the squeeze?
“We need to strike the right balance to ensure healthy, affordable – and preferably British-produced – food is available to all of us.”
After taking oral evidence in parliamentary evidence sessions, as well as written evidence, the Committee will issue a report with its recommendations. However, the EFRA does not have the power to change legislation.
Earlier this month, France’s government stated that it would take action against food retailers who fail to pass on lower wholesale prices to consumers. And its Finance Minister Bruno Le Maire said yesterday it could use tax measures to claw back profits from the food industry if it does not accept talks on high prices.
In the UK, the leader of the Liberal Democrats recently called for the UK’s competition watchdog to investigate claims that major supermarkets and food manufacturers were profiteering amid the cost of living crisis.
The government is due to hold a summit next week at No. 10 that will see Prime Minister Rishi Sunak meet with supermarket bosses and farming bodies to discuss how the sector can get a grip on soaring prices.
In recent days, chains such as Tesco and Sainsbury’s have started reducing the cost of own-label bread, butter and milk to reflect falling global wholesale food prices.
A report by The Times said the leading supermarkets yesterday assured chief secretary to the Treasury John Glen and other officials that food inflation was “past the peak” and that prices would come down soon.
NAM Implications:
- Given the struggles of cash-strapped consumers…
- …the key issue has to be speed of resolution.
- Getting some realistic steps sorted before Autumn is essential.
- Otherwise this will be regarded as a waste of time by those most affected…
