Price controls on essential food items: consultation paper

Chapter 1: Aims and intentions

Why is intervention required?

In recent years, the people of Scotland have experienced significant levels of food inflation. Food prices have risen by just under 40% over the last five years, increasing faster than average incomes over the same period. Although recent food inflation has eased from historic highs, food prices remain substantially higher than they were prior to the cost-of-living crisis. Recent data from the Office of National Statistics^[1] shows that cumulative food inflation since 2020 was 38.1% to July 2026, compared to 32.1% for general inflation and 35.3% for average incomes (to June 2026) as shown in Figure 1. As a result, many households continue to experience food affordability pressures. These pressures are particularly significant for lower-income households, who typically spend a greater proportion of their income on food.

Evidence from the Competition and Markets Authority indicates that food price inflation in recent years has largely reflected increases in costs throughout domestic and global supply chains rather than a weakening of competition in the grocery sector. We know that for most food products, UK grocery retail markets continue to operate competitively.

However, competitive markets can still produce outcomes which create significant affordability challenges for households. Food differs from many other consumer products because we cannot live without it and so households cannot avoid purchasing it. Food price inflation disproportionately impacts low-income households: whilst the average UK household spends 10.9% of equivalised income on food and non-alcoholic drinks, this rises to 15.2% for the poorest fifth of households, as shown in Figure 2.

Looking ahead, there remains significant uncertainty regarding future food prices. Recent experience demonstrates that food systems can be affected by a range of global shocks, including our exit from the European Union, geopolitical conflict, disruption to energy markets, a global pandemic, extreme weather events and climate-related impacts on agricultural production. Therefore, putting in place measures now to protect households from further price shocks is crucial.

The importance of food affordability extends beyond household budgets. Evidence suggests that sustained affordability pressures can influence purchasing choices, contribute to food insecurity and make it more difficult for households to afford healthier diets.

Polling conducted by Obesity Action Scotland^[2] indicated that 65% of those polled reported that the cost-of-living crisis has made it harder to buy healthy food, rising to 78% in the most deprived communities. Further food price inflation could lead to detrimental impacts on a wide range of health outcomes for all those impacted. In children, food insecurity is associated with asthma, anaemia and poor behavioural and educational outcomes. Food insecurity in adults is associated with cardio-metabolic disease, diabetes, obesity, insufficient nutrition and depression^[3].

Food insecurity is defined as “the full range of experiences from worry regarding ability to afford food, through to compromising on quality and quantity of food and experiencing hunger”. In 2023/2024 combined, 8% of adults worried about running out of food due to a lack of money or other resources in the preceding 12 months. This rises to just over a third (36%) of adults in single parent households, followed by 21% of single adult and 19% of large family households. According to Trussell^[4], one million people across Scotland, including 210,000 children, lived in food insecure households in 2024 with households in the most deprived areas of Scotland three times as likely to be food insecure than households in the least deprived areas (26% vs. 8%).

All of this combined, describes an increasingly difficult situation that many in Scotland experience on a daily basis. The Scottish Government is of the view that the consequences of food price inflation for household affordability cannot be allowed to continue unchecked and that we must equip ourselves with the tools needed to help ensure everyone in Scotland can afford the basic food necessities.

The policy proposal explored by this consultation is about capping the price of essential food items.

The objective that we are seeking to achieve through this work is to improve the affordability of a selection of essential food items, particularly for those on lower incomes. Our approach should also support a healthy and balanced diet.

Food affordability is influenced both by the prices consumers pay and by the financial resources available to households. This consultation focuses on food prices. The proposed policy would place limits on the price of certain essential food items but would not directly regulate the costs of producing, processing, transporting or selling food. Those costs will, however, be important considerations in the design of any intervention.

In addition to consulting on this proposal the Scottish Government is taking forward work to address wider cost-of-living issues. We will increase the value of the Scottish Child Payment for eligible households with children under one. To help with heating bills, we will provide winter heating payments to pensioners, families with disabled children and the households most in need. We will protect existing support around free prescriptions and free tuition fees for undergraduate students.

As part of this work, we wish to ensure that any future approach addresses the issue of food affordability in a way that protects Scotland’s primary producers in our farming and fishing communities.

Consultation questions

1. Do you agree or disagree that improving the affordability of essential food items, particularly for low-income households, should be a policy priority for the Scottish Government? [Agree. Disagree. Unsure]

2. Do you agree or disagree that government intervention is required to improve the affordability of essential food items? [Agree. Disagree. Unsure]

3. Do you agree or disagree with the proposal to introduce price caps on selected essential food items? [Agree. Disagree. Unsure]

4. Please explain your answers to Questions 1 to 3, including any alternative approaches or steps that should be taken to improve food affordability.

5. What do you consider to be the main benefits of food price caps? Please provide evidence where possible.

6. What do you consider to be the main risks or unintended consequences of food price caps? Please provide evidence where possible.