Supermarkets in the UK are being urged by the government to limit food prices of essential items in return for easing regulations, stated recent reports.
According to BBC, it is understood the Treasury had asked retailers to freeze price rises on certain products in exchange for an easing of packaging policies and a potential delay to rule changes around healthy food.
The policy would be voluntary and apply to key groceries such as eggs, bread, and milk, according to retail industry sources with knowledge of the plans. It was reported that Number 10 itself is in talks with supermarket bosses about the possible intervention.
The rate of food price rises is currently 3.7% - while the overall rate of inflation stood at 3.3% in March.
Some industry groups have warned the rate of food price rises could hit nearly 10% by the end of the year.
The British Retail Consortium (BRC), is reportedly dismissing the proposal, saying that the policy would "force retailers to sell goods at a loss".
“The UK has the most affordable grocery prices in western Europe thanks to the fierce competition between supermarkets," The Guardian quoted Helen Dickinson, the chief executive of the British Retail Consortium trade body, as saying.
“Rather than introduce 1970s-style price controls and trying to force retailers to sell goods at a loss, the government must focus on how it will reduce the public policy costs which are pushing up food prices in the first place.”
The potential move comes after the chancellor, Rachel Reeves, met supermarket bosses last month to discuss concerns rise about the potential impact on the cost of living, including higher food prices, as a result of the Middle East conflict.
Reeves is due to announce measures to help households with the cost of living on Thursday (May 21). People close to the talks said there had yet to be any agreement.
As part of its drive to keep prices down, the government announced plans on Wednesday to give watchdogs more powers to tackle unfair price rises.
A Treasury spokesperson said: “The chancellor has been clear we want to do more to help keep costs down for families, and will set out more detail in due course.”