‘I hope it haunts you: Supermarkets reject calls for price caps on essential items.
Supermarkets have rejected calls for price caps on essential items after an MP described “haunting” images of security tags placed on baby formula – a sign of the desperation many faces amid the cost of living crisis.
Senior figures from Tesco, Sainsbury’s, Asda and Morrisons were all united in their resistance as they were grilled by MPs on the Business and Trade Committee on Tuesday.
They argued their market is already “fiercely competitive” and does a great job of regulating itself, rejecting accusations that they are profiteering and contributing to so-called “greed-inflation”.
Committee member Ian Lavery MP said: “If you look at the images of baby formula milk in locks, it haunts me, and I hope it haunts you.
“In light of what the IMF reported today about profiteering causing inflation, would you cap or support capping essential items like your counterparts in France?
Calls for Price Caps on Essential Items
Responding to the Labour MP after being pressed into giving a simple “yes or no” answer, Tesco commercial director Gordon Gaffa said: “We don’t believe price caps would be helpful.”
David Potts, CEO of Morrisons, added: “I would say competition leads you to the right place.”
Asked earlier in the hearing about the idea of voluntary price caps introduced as an industry standard, similar to the French model, Rhian Bartlett, commercial food director for Sainsbury’s, warned of “unintended consequences”.
She said the supermarket industry in the UK is already a “fiercely competitive” market, with chains “watching and matching each other’s prices all the time”.
Before prices of essential goods spiked in Zimbabwe this month, cab pilot and father-of-six Victor Makazhu could buy almost two weeks of groceries for $45. Now that quantity will get him less than seven days’ worth. Pretence soared to a 10-year high above 40 per cent in December and has probably risen further. President Emmerson Mnangagwa lifted fuel prices by 150 per cent this week, leading to protests that have activated a crackdown by security.
“At the moment, I cannot afford ample food for my family,” Makazhu said after buying staples in the centre of Harare on Thursday.
Impact on Consumers
“These groceries will not rear me a week,” he told Reuters, pointing to 2 kg of sugar, rice, flour, maize meal, and milk.
The southern African nation discarded its hyperinflation-wrecked currency in 2009 and embraced the dollar.
Over time, the give of dollars has dried up, and in November 2016, power in Harare launched surrogate – ‘bond notes’ covered by a hard money loan and pin at 1:1 to the dollar.
On the street, however, $1 now gets up to three bond notes, leaving the subject able to do little but observe as the money in their bank accounts loses value compared to hard cash.
Few could blame Zimbabweans for affection and a sense of deja vu.
While nowhere near the 500 billion per cent hyperinflation of the crisis of 2008, the country is again wrestling with soaring prices and scarcity of fuel and medicines.
After four hours of what natives call ‘speculative queueing’ outside a stuffing station in the town centre, schoolteacher Gilbert Kepekepe was immobile, nowhere near getting served.
Before the latest price growth, he used to spend $230 to pack his tank, which he did twice a month. Now that would fetch him $528.
“I will probably have to cut on some other things or decide not to pilot to work. But the other question is, ‘Is it cheaper to use public convey” said Kepekepe.
Alternative Solutions and Measures
Analysts said the power price hike would trickle down to other essential goods and services, and public taxis known as “zombies” have at least doubled their fares in the last two weeks.
Supermarkets have rejected calls for price caps on essential items after an MP described “haunting” images of security tags placed on baby formula – a sign of the desperation many faces amid the cost of living crisis.
Senior figures from Tesco, Sainsbury’s, Asda and Morrisons were all united in their resistance as they were grilled by MPs on the Business and Trade Committee on Tuesday.
They argued their market is already “fiercely competitive” and does a great job of regulating itself, rejecting accusations that they are profiteering and contributing to so-called “greed-inflation”.
Committee member Ian Lavery MP said: “If you look at the images of baby formula milk in locks, it haunts me, and I hope it haunts you.
“In light of what the IMF reported today about profiteering causing inflation, would you cap or support capping essential items like your counterparts in France?
Morrisons CEO David Potts told the committee he’d look to put more from the Savers Range into its smaller convenience stores. (Getty Images)
Responding to the Labour MP after being pressed into giving a simple “yes or no” answer, Tesco commercial director Gordon Gaffa said: “We don’t believe price caps would be helpful.”
David Potts, CEO of Morrisons, added: “I would say competition leads you to the right place.”
I asked earlier in the hearing about the idea of voluntary price caps introduced as an industry standard, similar to the French model, Rhian Bartlett, food.
