UK’s competition watchdog should investigate reports that food producers and supermarkets could be unfairly using their market power to inflate their markups and raise prices even further, Lib Dems has said.
With the rising cost of a weekly shop adding to pressure on households across the country, the Liberal Democrat leader, Ed Davey, has called on the Competition and Markets Authority (CMA) to investigate whether any profiteering was taking place among supermarkets and food multinationals.
“We need to bring soaring food prices back under control and offer relief to families. That means cracking down on profiteering by food multinationals and the big supermarkets, so customers get a fair deal,” The Guardian quoted Davey as saying.
Analysis by the Lib Dems showed the cost of a typical weekly shop has now risen by nearly £12, or £604 in the space of a year.
Davey criticised supermarkets for raking in millions of pounds in profits while food inflation has soared. Grocers and makers have reported a drop in profits in recent weeks, but experts are claiming that more could be done to help shoppers struggling with rising prices.
Reports of profits amid cost-of-living crisis have been drawing sharp criticism from union leaders. Supermarkets and makers are being accused of “greedflation” – when firms exploit high inflation to create excessive profits.
Last week, Sainsbury’s announced profits of £690m for the year to 4 March, beating expectations. Chief executive Simon Roberts said the retailer’s profit margins had slipped from 3.4 per cent to 2.99 per cent amid the impact of rising costs, while arguing it was “absolutely determined to battle inflation for our customers”.
Tesco recorded profits of £753m last year, half the level a year earlier. Ken Murphy, the Tesco chief executive, said the retailer was “robustly challenging every cost increase” with suppliers and had not passed on all its additional costs to shoppers.
New research from union group Unite in late March shows how profit margins for the first half of 2022 were 89 per cent higher compared to the same period in 2019.
“Despite the rise in wholesale prices, Tesco, Sainsbury’s and Asda still managed to increase their profits by an astonishing 97 per cent in 2021,” Unite general secretary, Sharon Graham said.
“At the same time the eight top UK food manufacturers made profits of £22.9 billion. Profiteering is happening right along the food supply chain and workers are paying the price
“It’s more evidence that the British public are hostage to greedflation . It’s time our elected leaders and policy makers woke up to corporate greed and challenged it head on,” Graham said.
