And, in the wake of the credit crunch, rising fuel bills and consumers having less to spend in their purses, the grocers thought they were in for a tough time.
Darling is worried that rising food prices are creating inflationary pressure and that the poor have been hit worst. And research by Ernst & Young has shown that the spiralling cost of food and energy was responsible for more than half of the UK’s 3 per cent inflation rate. Depending on this year’s wheat harvest, more food prices rises are possible.
The grocers – which are working hard to protect consumers from any price increases – were called on for their expertise and knowledge and seemingly managed to get across their side of the argument without too much trouble.
Grocers including Tesco and Asda, plus the British Retail Consortium, were able to convey what is happening on the high street. They pointed out that it’s tough and, yet, they are increasingly trying to be competitive.
The debate quickly led on from food prices to the Competition Commission, but their arguments for both were the same – that unnecessary regulations will impact on the consumer. With the Competition Commission, supermarkets doubt that the UK consumer will benefit from the tightening up of UK planning laws and the creation of a supermarkets ombudsman. Similarly, the Government is in the throws of a food policy review that covers everything from production to the environment and the grocers argued that any regulations could have a knock-on effect on consumers.
The meeting was regarded as positive and the grocers left having communicated their concerns. Whatever steps the Government takes over food, it should not inhibit competition between the grocers. Effective competition insulates consumers from price rises and any unnecessary red tape would be harmful.
Grocers couldn’t help but have a pop at the Government over the Competition Commission, but essentially – whether it’s a tightening of planning laws or an overhaul of food production – any further regulation needs to keep consumers at the top of the agenda.
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