Business Groups Urge Swinney to Scrap Scotland's Food Price Cap Plan

First Minister John Swinney is facing widespread pushback from business leaders over the Scottish Government and SNP plan to introduce a legal food price cap on essential items. A coalition of 23 business organizations, including the Scottish Retail Consortium, the Food and Drink Federation Scotland, Scottish Bakers, and Dairy UK, has written a joint letter urging Swinney to abandon the policy ahead of his upcoming Programme for Government speech.

The Scottish National Party pledged to compel large supermarkets to limit prices on essential grocery items such as milk, eggs, cheese, and rice to help families manage the rising cost of living. Swinney defended the initiative by emphasizing that many residents struggle to afford a basic grocery shop, stating that the government holds a public health responsibility to ensure access to an affordable, nutritious diet.

However, industry representatives warned that a statutory price cap would be ineffective and counterproductive. The joint letter highlighted that legal price caps fail to address the root causes of food price inflation, which are primarily driven by elevated production, energy, refrigeration, and supply chain distribution costs.

Ewan MacDonald-Russell, deputy head of the Scottish Retail Consortium, publicly criticized the policy, describing price controls as an ineffective gimmick that merely displaces costs elsewhere. Pointing to similar measures in Hungary, MacDonald-Russell noted that price caps led to grocery shelf shortages, increased reliance on cheap imports, and higher overall costs for consumers. He added that Scottish shoppers currently benefit from some of the most affordable food prices in western Europe and warned that caps could leave smaller retailers unable to compete.

The proposed legislation also faces considerable constitutional and legal obstacles. Enacting statutory price controls would likely require an exemption from the UK Internal Market Act 2020. This UK legislation was introduced post-Brexit to prevent trade barriers and regulatory divergence between Scotland, England, Wales, and Northern Ireland. It remains unclear whether UK ministers would grant Holyrood such an exemption.

Additionally, experts note that any passed legislation would be vulnerable to court challenges from major supermarket operators. The legislative process itself is expected to take at least a year.

In response to the opposition, a Scottish Government spokesperson reiterated that assisting households with the cost of living remains a top priority. The government confirmed that a formal consultation will launch shortly, and ministers are hosting a summit with food producers, farmers, and retailers next week to discuss alternative ways forward.

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