The Scottish Government has launched a public consultation on proposals to introduce price controls on essential food items, aiming to alleviate the persistent cost of living pressures faced by households, particularly those on lower incomes. This initiative, which includes a draft Bill, delivers on a commitment made during the government’s first 100 days.
The consultation, which remains open until 24 November 2026, seeks detailed feedback on how such a mechanism would operate. It specifically targets large supermarket chains, defined as businesses with over 250 employees and an annual turnover exceeding £250 million, where at least half of this revenue is derived from grocery sales. The proposed legislation would mandate a maximum price for a basket of “essential food items,” potentially including up to 50 products such as bread, milk, and eggs. Retailers would be required to offer at least one product in each capped category at or below the set price, while still being able to sell higher-priced alternatives.
Minister for Business and Fair Work, Tom Arthur, emphasised the government’s commitment to tackling food affordability. “Helping people with the cost of living is a top priority of this government,” Arthur stated. “Our aim is to make essential food items more affordable for households struggling to pay for their weekly shop, particularly those on lower incomes.” He added that the consultation would consider a broad range of factors required to implement a food price cap, stressing a desire to work with retailers and protect farmers and food producers. “I am committed to taking action to address food affordability that works with retailers and protects farmers and food producers,” Arthur affirmed.
Rising Food Insecurity and Stubborn Inflation
The proposals come against a backdrop of significant food insecurity across Scotland. In 2024, one million people in Scotland, including 210,000 children, experienced food insecurity, indicating that hardship is becoming “normalised.” Furthermore, nearly one in three low-income families reported skipping or reducing meal sizes, with nearly 3 in 20 accessing food banks due to rising costs, as of May 2023. More recently, an August 2026 Trussell Trust survey revealed that 29% of young people aged 16 to 25 in Scotland, approximately 200,000 individuals, had cut back on food in the preceding three months due to financial strain. Lower-income households are disproportionately affected by food price increases, dedicating a larger share of their overall income to essential food, energy, and transport costs.
While food price inflation in the UK reached a peak of 19.1% in March 2023, it has since eased to 1.30% in July 2026, compared to the same month in the previous year. However, UK food prices collectively rose by 38.6% between November 2020 and November 2025, underscoring the cumulative impact on household budgets.
Industry Apprehension and Economic Debate
The prospect of statutory price caps has already met with considerable opposition from industry bodies representing retailers, farmers, and food producers. Concerns have been raised that such measures could lead to unintended consequences, including shortages on shelves or the replacement of domestically produced goods with cheaper imports. More than 20 organisations, including the Scottish Retail Consortium and FDF Scotland, reportedly urged First Minister John Swinney to abandon the plans, arguing they would not address the root causes of the cost of living crisis.
Economists frequently express caution regarding price controls, highlighting their potential to distort market incentives, reduce product quality and choice, and ultimately prove ineffective in curbing underlying inflation. Critics argue that price caps are a “blunt instrument” that benefit all consumers, including the affluent, rather than efficiently targeting assistance to those most in need. Alternative approaches, such as direct cash transfers or expanded benefit schemes, are often cited as more effective ways to support struggling households without market distortions. Supermarkets typically operate on narrow profit margins, often between 2% and 4%, which could make it challenging for them to absorb losses from mandated price reductions. Historical precedents, such as the Nixon administration’s price controls in the 1970s and those implemented in Zimbabwe in the early 2000s, have been linked to diminished production, supply shortages, and the emergence of black markets.
Conversely, some economic perspectives acknowledge that in times of acute economic crisis or significant supply shocks, price controls can offer “immediate relief” and are politically attractive due to their visible impact.
Interaction with the UK Internal Market Act
A critical aspect of the Scottish Government’s proposal is its potential interaction with the United Kingdom Internal Market Act 2020 (UKIMA). The Act, passed in December 2020, aims to prevent internal trade barriers and restrict the legislative powers of devolved administrations in areas such as economic and public health policy. The Scottish Government has acknowledged this, stating it has undertaken an initial assessment of the potential interaction and plans to engage with the UK Government as policy develops. The UKIMA’s “mutual recognition” principle generally ensures that goods lawfully produced or imported in one part of the UK can be sold across the entire internal market, which could present challenges for Scotland’s ability to impose unique regulatory standards or price caps.
You Might Also Like:
This dynamic has previously impacted Scottish policy, notably with the delay of Scotland’s Deposit Return Scheme, which the Scottish Government attributed to the UK Government’s refusal to grant a full exclusion from the Internal Market Act. Similar issues arose with single-use plastics legislation.
Historically, the UK has implemented price controls during periods of national crisis, such as the Corn Laws and wartime rationing, but largely shifted towards free trade principles in the 18th and 19th centuries. The current Scottish proposals mark a significant re-evaluation of direct market intervention in a modern, devolved context.
The consultation period offers a crucial window for all stakeholders to contribute to the debate surrounding this interventionist approach to food affordability, with significant economic and regulatory implications to be navigated before any legislation can be finalised.
