The UK government says it will investigate whether parts of the food supply chain are profiteering amid soaring costs.
MPs from the cross-party Environment, Food and Rural Affairs (EFRA) Committee have confirmed they will start investigating how equitably profit and risk is shared throughout the food supply chain.
The announcement came amidst recent claims that some supermarkets have been “profiteering” from high food prices, and they were accused of failing to reduce prices as supply costs have fallen.
Chair of the committee, Robert Goodwill (Con), said: “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 to get to the bottom of what’s going on.”
Despite supermarket executives telling the Treasury food inflation was “past its peak”, and that prices would begin to fall, latest figures from the Office for National Statistics (ONS) find food and non-alcoholic drinks prices rose at their fastest rate in 45 years in the year ending March 2023.
The price of cucumbers has risen by 52%; olive oil is up 49%; while hard cheese was 44% more expensive.
Food inflation is now at 19.2%, up from 18.2% in February. This is the highest rate of food inflation since 1977, when it was estimated to be 21.9%.
Goodwill said: “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.”
The committee said it will look into how the government is currently monitoring and regulating supply chain costs.
The investigation follows continued disruption to the UK’s food security.
MPs from the Public Accounts Committee recently warned that outdated IT systems used by the Department for Environment, Food and Rural Affairs were putting food and water supplies at risk, and that it was still using manual processes for more than 14m transactions a year.
Separately, former Asda buyer and retail analyst, Ged Futter, told Supply Management that apple growers were being forced to cut down orchards and cancel planting new trees. Meanwhile The National Farmers Union previously warned farmers were cutting back production because cost increases were not being passed down the supply chain.
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