Branded suppliers accused of profiteering and contributing to food inflation

The UK’s Competition and Markets Authority (CMA) has found that three quarters of branded suppliers have raised prices by more than their costs increased. In doing so, these branded suppliers “have contributed to higher food price inflation”. In an ongoing review of the grocery sector, the watchdog analysed 10 product categories to see if shoppers have been overcharged for items during the cost-of-living crisis.

The CMA found that while there is evidence of profiteering, in most cases there are cheaper own-label alternatives available. In most cases, as food prices have risen, many consumers have switched away from brands which it explained has led to a decline in brands’ market share and profits. The CMA said this is positive for competition as it hopes the prices of branded items will lower.

Leading brands told the watchdog that they are aiming to use any future reductions in their input costs to offer customers more promotions rather than cut the standard price they charge supermarkets for their products. While there are own-label alternatives in the majority of these categories, the CMA said that there is little evidence of consumers switching to cheaper baby formula products, with limited numbers of own-label alternatives.