With food inflation still running at record highs, the Competition and Markets Authority (CMA) announced yesterday that it was stepping up its probe into grocery prices.
Earlier this year, the regulator began looking into the sector and unit pricing as part of work to support consumers during the cost of living crisis. The CMA noted that global factors had been the main driver of grocery price increases, with it yet to uncover any evidence pointing to specific competition concerns.
However, with retailers and manufacturers facing claims that they are profiteering during the inflation crisis, the regulator said it was stepping up its work in the sector to understand whether any “failure in competition is contributing to grocery prices being higher than they would be in a well-functioning market”.
The CMA stated that it wanted to provide findings swiftly as consumers continue to struggle with rising food costs. It will focus on completing work to assess how competition is working overall in the grocery retail market, drawing on publicly available data and other information.
Alongside this, it will identify any product categories that might merit closer examination across the supply chain.
Sarah Cardell, Chief Executive of the CMA, commented: “Grocery and food shopping are essential purchases. We recognise that global factors are behind many of the grocery price increases, and we have seen no evidence at this stage of specific competition problems. But, given ongoing concerns about high prices, we are stepping up our work in the grocery sector to help ensure competition is working well and people can exercise choice with confidence.”
Last week, the cross-party Environment, Food and Rural Affairs (EFRA) committee announced that it would 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 government is holding its ‘Farm To Fork’ summit today at No10, which 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.
Meanwhile, the CMA announced yesterday that it had found evidence that weakening retail competition was contributing to higher fuel prices for drivers. It noted that fuel margins have increased across the retail market, but in particular for supermarkets, over the past four years.
The CMA said it was not satisfied that some supermarkets had been sufficiently forthcoming in their responses to its road fuel market study. “So we will be calling them in for formal interviews to get to the bottom of what is going on,” Cardell said.
