Liberal Democrat leader Sir Ed Davey has called for a watchdog investigation © Photo by Ian Forsyth/Getty Images
Liberal Democrat leader Sir Ed Davey has called for a watchdog investigation © Photo by Ian Forsyth/Getty Images

MPs call for investigation into supermarket ‘profiteering’

2 May 2023

Liberal Democrat leader Sir Ed Davey has called on the competition watchdog to investigate potential ‘profiteering’ by supermarkets.

Davey said he wants the Competition and Markets Authority (CMA) to examine claims that certain supermarkets have taken advantage of food price inflation by raising prices by more than they ordinarily would.

The call comes amid food inflation accelerating to 15.7% in April, up from 15.0% in March.

In addition to this, analysis by the Party found the cost of a typical weekly shop is now £12 more than it was this time last year.

Davey said: “The cost of the weekly shop is going through the roof while supermarkets are raking in eye-watering profits.

“Millions of families risk being overwhelmed by soaring food prices, coming on top of rising bills and housing costs.”

Davey is also calling for tougher rules to prevent supermarkets from raising the price of essentials by more than is absolutely necessary. 

However, retail analyst and former buyer at Asda, Ged Futter, told Supply Management: “Where's the evidence that they're profiteering?”

Futter said that both Sainsbury’s and Unilever had reported a fall in profits in recent weeks. 

He added: “Sainsbury's profits were down. Tesco's profits were down. All the retail profits are down. So if someone's profits are down, how can you accuse them of profiteering when their profits are lower than last year?”

According to the British Retail Consortium (BRC), current food inflation is above the three-month average rate of 15.1%, and is the highest inflation rate in the food category on record.

However, the trade body said the price of butter and vegetable oils has already started to come down as retailers have passed on savings from further up the supply chain. It added that it anticipates food prices in general to start falling in the coming months. 

BRC chief executive Helen Dickinson said: “We should start to see food prices come down as the cut to wholesale prices and other cost pressures filter through. In the meantime, retailers remain committed to helping their customers and keeping prices as low as possible.”

However, Davey said price increases are not being carried along the supply chain to growers and producers.

He is also calling for a £1bn boost to British farms to increase sustainable domestic food production. This includes changing visa rules currently preventing farmers and fishers from recruiting international workers.

He said: “British farmers will not see any extra income from these soaring food prices. These food prices benefit absolutely no one but the supermarket giants.

He added: “We need to bring soaring food prices back under control and offer relief to families. That means cracking down on profiteering by food multinationals and the big supermarkets so customers get a fair deal.”

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