{"id":58062,"title":"Business groups demand scrapping of Scottish food price cap","publisher":"Stockmark.IT","author":"Stockmark.IT Website","published":"2026-09-01T05:29:14+00:00","modified":"2026-09-01T05:29:14+00:00","canonical_url":"https://stockmark.it/business-groups-urge-swinney-to-scrap-ineffective-food-price-cap-plan/","markdown_url":"https://stockmark.it/business-groups-urge-swinney-to-scrap-ineffective-food-price-cap-plan.md","json_url":"https://stockmark.it/business-groups-urge-swinney-to-scrap-ineffective-food-price-cap-plan.json","category":"Business","categories":["Business","Economy","Financial","Food Industry","Food Prices"],"featured_image":"https://i0.wp.com/stockmark.it/wp-content/uploads/2026/09/business-groups-demand-scrapping-of-scottish-food-price-cap.png?fit=1536%2C1024&quality=80&ssl=1","format":"news","language":"en-GB","content":"Twenty-three business organisations have jointly urged the Scottish first minister to abandon his proposal for a legal cap on the prices of essential food and drink items. The groups, which represent sectors including retail, manufacturing, distribution, and food production, have sent a letter to John Swinney arguing that the planned statutory controls would be ineffective. The intervention comes as the first minister prepares to outline his programme for government on Tuesday, following a pledge in the SNP election manifesto to compel large supermarkets to limit the cost of basic goods such as milk, eggs, cheese, and rice.\n\nThe signatories, which include the Scottish Retail Consortium, the Food and Drink Federation Scotland, Scottish Bakers, and Dairy UK, contend that a price cap fails to address the root causes of elevated food prices. They cite rising production, refrigeration, and distribution costs as the primary drivers of inflation. Ewan MacDonald-Russell, deputy head of the Scottish Retail Consortium, described the proposal as an appallingly terrible idea during an appearance on the BBC’s Radio Scotland Breakfast programme. He argued that price caps do not tackle food price inflation and instead act as a gimmick that displaces costs elsewhere in the supply chain.\n\nMacDonald-Russell stated that he could not identify a single example where such a measure had worked successfully. He pointed to Hungary as a cautionary case, noting that a similar policy there led to shelf shortages, the replacement of domestic products with cheap imports, and increased tension between retailers and customers. The Scottish Retail Consortium also warned that the policy could force small shops, which may not be covered by the proposed legislation, into an uncompetitive position. Despite acknowledging that food price inflation is a significant issue, the group maintained that the current market model is the most effective approach and that introducing caps would likely worsen the situation by increasing the overall cost of a shopping basket.\n\nSwinney has defended the policy by stating that people are struggling to afford a basic shop and that he has a public health responsibility to ensure an affordable nutritious diet. However, the business groups argue that the scheme would impose additional costs on businesses that would ultimately be absorbed by consumers. The implementation of such a cap is expected to require changes to the UK Internal Markets Act of 2020, legislation introduced after Brexit to prevent trade barriers and regulatory divergence across the United Kingdom. This legal complexity adds to the challenges facing the proposal, as the Scottish government would likely need an exemption from the UK government, which has not yet indicated whether it would grant one.\n\nThe Scottish government has responded by stating that helping people with the cost of living is a top priority. A spokesperson said ministers have welcomed engagement with stakeholders, including retailers, food producers, and farmers, and that a consultation will launch shortly to gather further views. The government is also holding a summit with food producers and retailers next week to consider the way forward. While the first minister aims to demonstrate a commitment to tackling the rising cost of living, the proposal faces significant hurdles, including the time required for law-making and the potential for legal challenges from supermarkets if the legislation is eventually approved at Holyrood."}