How the SNP’s food price cap could work

The SNP’s promise to cap the price of up to 50 “essential” foods is amongst the most eye-catching of the election.

Legislation is pledged in the first year of a new SNP-led Scottish Government in an effort to ease the cost of living and improve public health by boosting nutrition.

The Scottish Retail Consortium has called it a “potty gimmick”. The Scottish Grocers' Federation has warned it could put smaller retailers out of business. The Institute for Fiscal Studies has called it both “radical and risky”. And the UK Government has said the proposal is “incoherent and undeliverable”.

Even John Swinney has acknowledged that UK ministers may seek to block the plan under the Internal Market Act (IMA), and that it can’t be put in place without detailed work with the food and drink sector.

But in a new blog post, one constitutional expert has spelled out how the policy could work.

Professor Nicola McEwen, director of the Centre for Public Policy at the University of Glasgow, has said there is a way it could work – but it’s not without risk.

Swinney has already said he would enact the measure under public health grounds which, unlike trade rules, are the business of the Scottish Parliament.

This one would have to be considered within the terms of the IMA, that controversial piece of law made to keep domestic trade on a level playing field after Brexit.

The Scottish Parliament withheld consent for the move, but it went ahead anyway.

The IMA is supposed to protect the principle of mutual recognition, preventing divergence in rules and regulations under devolution, as well as that of non-discrimination of goods, regardless of where in the UK they are produced and sold.

The latter principle takes in pricing, and was part of the rationale behind the shelving of Scotland’s Deposit Return Scheme to prevent packaging waste, which would have placed a 20p tariff on bottles and cans north of the border while other consumers faced no such levy.

McEwen writes that while the IMA doesn’t stop MSPs from “determining regulations within their spheres of competence”, it could “prevent incoming goods and services being subject” to regulations laid down.

And she says that though the UK Government cannot block price caps under the IMA, it could refer the matter to the Supreme Court instead, arguing that it strays into reserved matters.

But it wouldn’t take a UK Government challenge to halt the scheme – it could come from business.

If that happens, it would create a court case similar to that raised by the Scotch Whisky Association against minimum unit alcohol pricing – a case that Scottish ministers ultimately won, but not before a lengthy delay to implementation.

“Any affected party from one part of the UK trading goods or services in another part can challenge laws on [IMA] grounds where they believe their market access is restricted,” McEwen says.

“The first minister’s defence of price caps as a public health intervention may be an attempt to frame them as ‘a necessary means of achieving a legitimate aim’, in this case, the protection of human health. But the health benefits of price caps would depend on the detail of the policy and seem more tenuous than was the case with minimum unit pricing of alcohol.

“In Scotland, as elsewhere, the objective of price caps is first and foremost about affordability; making essential products more affordable; health benefits may be a secondary consequence, but would they be a necessary means of achieving those benefits? Or could those benefits be achieved through other means that don’t lead to adverse market effects?”

It would be a “safer bet”, McEwen contends, to agree an exclusion from the IMA.

UK ministers would not grant that for the DRS, though did make a deal for the ban on glue traps for rodents that’s set to come into force in Scotland from 1 July.

To make it work, McEwen suggests, the Scottish Government would have to “demonstrate the health benefits”. And the very request for an exclusion would “test the limits of the Labour government’s new approach to managing the internal market through intergovernmental cooperation”.

“From idea to implementation, then, would be a resource-intensive, lengthy process with an uncertain outcome, raising questions about whether there may be more immediate and certain policy responses to the cost-of-living crisis,” she states.

It’s worth noting that such schemes have been tried before. The French government made the move in 2023, temporarily capping the cost of around 5,000 products in a deal with food firms.

Its action followed that of Croatia, which put limits on 30 food and hygiene products three years ago. That number has since risen to 100 in an expansion of the scheme.

There can be no arguments that grocery prices have risen in recent years.

The Office for National Statistics found food and non-alcoholic beverage inflation has increased to 3.7 per cent, up from 3.3 per cent in the 12 months to March 2026.

That follows earlier price shocks caused by the pandemic and Russia’s war on Ukraine.

Last year the Food and Drink Federation found that retailers were passing on some of the increased costs faced through rising wage bills to their customers and it’s feared that continuing instability in the Middle East may push prices up again.

The International Monetary Fund predicts that the Iran war will affect the UK economy more than any other advanced economy, and has downgraded its growth estimate to just 0.8 per cent, which compares with 1.3 per cent in January.

Meanwhile, the Food Foundation now puts the cost of a weekly basket of food at £53-£60 for an adult woman or man. The total represents an increase of 29-36 per cent since April 2022.

Launching the SNP manifesto, Swinney was at pains to say that the Scottish Government would work with industry to put his plan into action.

He said consultation would take place with food producers and sellers, and only large supermarkets would be included in the first instance, with efforts made to prevent unintended consequences for farming or smaller retailers, which may be no small ask.

Choice would be preserved for consumers, he said, with uncapped alternatives for sale alongside price-protected products, and a sunset clause written to allow the lifting of the law when “conditions allow”.

With two weeks to go until the election, the party must feel like it’s onto a winner because it’s asking big firms to act now, even before a vote has been cast.

Swinney has called for supermarkets to take “immediate, voluntary action” to ensure the availability of “affordable goods”.

“I am asking the large supermarkets to take immediate, voluntary action today in advance of the new law being in place this year,” he said. 

“The big supermarkets have an opportunity to do the right thing by people who are struggling right now and I urge them to do it ahead of the legal cap being in place. Filling up a basket of essentials should not empty your pocket and an SNP government on Scotland’s side will take action to support people during these tough times.”

Will voters buy it? We have vanishingly few days left before we find out.