The Government “must focus on how it will reduce the public policy costs which are pushing up food prices”, the British Retail Consortium (BRC) has said after reports the Treasury asked supermarkets to limit food prices in return for the lifting of some regulations.
The proposals would see shops voluntarily cap the prices of essential groceries such as eggs, bread and milk, according to the Financial Times.
The Treasury has said it would in return offer supermarkets “incentives” which may include easing packaging policies and delay potentially costly changes to healthy food rules, the newspaper said.
The Treasury asked supermarkets for guarantees that British farmers would not lose income from price caps, according to the FT.
Some measures, including the packaging regulations, generate revenue for the Treasury, it reported.
The Government has also recommended supermarkets reinvest the savings from the regulation changes to freeze grocery prices, it added.
This comes after UK food inflation rose to 3.7% in April.
