Scottish farmers could end up absorbing losses if ministers force supermarkets to sell capped prices on up to 50 essential food items, opponents warn. The government says large retailers should carry the financial burden to make a healthy weekly shop affordable, but producers say the hit will be pushed down the supply chain.
East Lothian farmer Jamie Wyllie, an office holder in the National Union of Farmers in Scotland, said the proposal is keeping him awake. He runs several farms producing pigs, sheep and crops for bread and cereal, and told reporters he cannot see supermarkets simply swallowing reduced margins. "I struggle to see how, or why, they would swallow that cost," he said. "They'll pass it down to us. We see it all the time."
Wyllie warned that his operation already runs on wafer-thin margins and cannot pass costs further down. "I'm the bottom of the food chain. I can't pass my costs on to anybody else," he said. His bills have risen in recent years after a UK government national insurance increase and a looming UK-wide fertiliser tax. Energy costs have also doubled, and his farm faces a standing electricity charge of £1,500 per month before using any units. He added the price-cap proposal "might make producers think twice about what they're doing" and "does keep you up at night".
The policy is out for consultation and would require large supermarkets to offer at least one variety of certain staples, such as milk, eggs, cheese and rice, at a capped price. If that product sold out, retailers could be required to offer a similar item at the same price. John Swinney, the first minister, has framed the plan as a "public health responsibility" to ensure affordability for struggling families, and ministers say they intend to press ahead despite scepticism.
Producers and business groups have pushed back. Last week 23 organisations wrote to the first minister urging him to drop the plan, and business groups have called on ministers to scrap what they describe as an "ineffective" approach. The Scottish government will convene a "fair food summit" on Tuesday, where Business Minister Tom Arthur will meet representatives from producers and retailers to discuss concerns and options. An impact assessment published by ministers suggested variants that would allow prices to rise while tracking below food inflation.
Delivering a price-cap across a complex supply chain presents legal and logistical challenges, and ministers face the task of convincing farmers such as Wyllie that protections for consumers will not leave producers worse off. The consultation remains open and ministers say they will engage with the supply chain as they refine the policy.
