The UK government has reportedly urged major supermarkets to voluntarily freeze prices on essential groceries like milk, bread, and eggs, but has faced strong resistance from the retail sector. While Treasury secretary Dan Tomlinson confirmed discussions with supermarkets about cost-of-living measures, he stated there were no plans for a mandatory price cap.

These discussions come amid growing public concern over rising food prices, which outpaced general inflation in April. The annual rate of food price increases stood at 3%, compared to the overall inflation rate of 2.8%. Some industry predictions suggest food price inflation could surge to nearly 10% by the end of the year, intensifying pressure on household budgets.

The government's proposal, which was first reported by the Financial Times, suggested that a voluntary price freeze could be exchanged for an easing of regulatory burdens, such as packaging policies and potential delays to healthy food rule changes. However, the idea has been met with a strong negative reaction from supermarket executives.

Stuart Machin, the chief executive of Marks & Spencer, described any government-imposed price cap as "completely preposterous." He argued that the government should instead focus on reducing taxes and regulatory burdens to allow supermarkets to operate more freely in a competitive market. This sentiment was echoed by other industry figures who believe such interventions could distort the market.

Treasury secretary Dan Tomlinson acknowledged the ongoing dialogue, stating, "It's right that the government looks across the board at what more we can do - both government levers but also talking to industry about the steps that they can take to support people with the cost of living." He emphasized that any measures would not involve a mandatory price cap enforced by the Westminster government.

The Scottish National Party (SNP) had previously announced plans for a mandatory price cap on certain food items in Scotland, a move that has also drawn criticism from industry bodies. The UK government's approach appears to favor voluntary cooperation, but the lack of enthusiasm from supermarkets suggests a potential impasse.

Industry insiders have expressed concerns that mandatory or even voluntary price caps on specific items could lead to unintended consequences, such as reduced availability or quality, as retailers struggle to maintain profitability under fixed price points. The competitive nature of the grocery market is often cited as a key factor in keeping prices in check.

As inflation continues to be a significant concern for consumers, the debate over how to best support households while maintaining a functioning market is set to continue. The government's next steps, and whether supermarkets will reconsider their stance, remain to be seen.