Retailers and processers accused of ‘price gouging’ on food

Retailers, processors and international freight companies have been accused of “price gouging” on food in the wake of Covid-19 and the war in Ukraine.

Barry Gardiner, a former Labour Defra minister, levelled the charge during a hearing of the Environment, Food and Rural Affairs (Efra) Select Committee this week, when he pointed out the top three supermarkets have seen a 97% increase in profitability since the pandemic.

See also: Retailers accused of failing UK farmers with imported eggs

In the food processing sector, he cited figures showing a 200% profitability increase over the same period, and a whopping 20,000% profit boost for international freight carriers.

“That means somebody is gouging,” he said. “They are not just passing on their increased input costs.”

Defra farming minister Mark Spencer, who was giving evidence to the committee, responded that the government brought together retailers, processors and primary producers on a regular basis to “thrash out” these concerns.

He also promised two reports on supply chain fairness in the dairy and pig sectors “very soon”, saying there would be “an argument to be more interventionist” if it “does not appear there is fairness there”.

The minister went on to acknowledge farmers and growers in the egg and fresh produce sectors were being “squeezed” too, but when asked if he could have done more to support them, said: “It is very difficult. To have that sort of interventionist approach from government, in my experience, makes things worse, not better.

“It tends to come with blunt tools, which get a blunt response. You just need people within that supply chain to act responsibly and take seriously the challenges we face.”

The exchanges at the committee came shortly after Tesco chairman John Allan told the BBC’s Laura Kuenssberg the company had “fallen out with suppliers” over price rises and was trying “very hard to challenge” them, prompting NFU president Minette Batters to say he was “living in a parallel universe”.