Government considering intervention on rising food prices despite backlash

The government is planning more policies to correct “market failures” in the cost of food, despite a backlash from retailers as well as from some ministers over a plan to introduce a price cap, a recent report has stated.

The Department for Environment, Food and Rural Affairs (Defra) is hiring researchers to create a “single food price model”, which would help ministers find the best ways of intervening to deal with rising food costs, The Telegraph reported.

“Defra is seeking an external research academic… to develop a single food price model… to gain an in-depth understanding of what drives food affordability,” states a contract tender published on a government website.

The model will be used to ensure that “government interventions” and policy considerations “arising from market failures or inequities will be based on sound and credible evidence”.

It comes amid backlash by retailers over reports that government is considering a move under which retailers to sign up to a voluntary price cap on basic goods. The announcement created an uproar as major supermarkets backed a statement that said the policy “will not make a jot of difference to prices” and accused Sunak of “recreating 1970s-style price controls”.

Prime minister Rishi Sunak has pledged to halve inflation by the end of the year from its January level of 10.1 per cent, but faces challenges in some sectors, including food and energy. To tackle the same, he has called a “Farm to Fork” summit last month during which he committed to a variety of measures, largely focussed on farmers, including plans to cut red tape, increase water security and launch reviews of the egg and horticulture sectors.

Some industry bosses however described the summit as “empty” as it did not contain any concrete measures to deal with inflation.

“If you are not doing something about the cost of living, cost of production, access to labour and affordability of food then you are never going to fix the overall problem,” an attendee told The Guardian.

A government spokeswoman said: “The Government has not and will not consider imposing price caps or any similar interventions. This is a technical project aimed at enhancing existing analysis of food price inflation.

“We know the pressure households are under with rising costs and while inflation is coming down, food prices remain stubbornly high. We continue to support households through our £94bn package, worth £3,300 on average per household this year and last.”