The Scottish Government has now published the first detailed framework for statutory controls on the price of essential food. What began as an election proposal has reached consultation with draft legislation, proposed retailer thresholds, enforcement powers and an unresolved question running through the entire scheme: where in the food chain does the cost of cheaper food eventually land?
On 1 September 2026, the Scottish Government opened a consultation on legislation that would allow ministers to set maximum prices for selected essential foods sold by large grocery retailers in Scotland.
The proposal has moved considerably beyond the original commitment to place price ceilings on a basket of basic goods. The consultation is accompanied by illustrative provisions for a Food Price Cap (Scotland) Bill, a partial Business and Regulatory Impact Assessment, nutritional work from Food Standards Scotland and an examination of comparable interventions overseas.
No final basket of foods has been selected. No capped prices have been set. No date has been established for the introduction of controls. The consultation remains open until 25 November.
What now exists is the outline of a regulatory system.
Under the model being considered, Scottish ministers would receive powers to specify which foods were subject to a maximum price, determine the level of that price, alter the basket over time and decide which retailers were required to comply.
The Government is currently considering applying the scheme to grocery businesses with more than 250 employees, turnover above £250 million and the majority of their turnover derived from grocery sales. Smaller shops and convenience retailers would initially sit outside that definition.
Local authorities could become responsible for enforcement.
The proposal therefore reaches considerably further into the structure of the Scottish food economy than a temporary supermarket promotion. It creates a possible new relationship between government, large retailers, food manufacturers, farmers, fishers, processors, wholesalers and consumers.
Food is almost 40 per cent more expensive than five years ago
The policy has emerged after one of the largest sustained increases in food prices experienced by Scottish households for decades.
The Scottish Government says food prices have increased by just under 40 per cent over the past five years and have risen faster than average incomes.
The sharpest phase of food inflation followed the pandemic and Russia’s invasion of Ukraine, although the causes were wider than either event. Energy prices increased the cost of processing, refrigeration, manufacturing and distribution. Fertiliser prices rose. Transport costs increased. Labour costs changed. Commodity prices moved sharply. Weather and harvest conditions affected individual products. Brexit altered parts of the food trading and labour environment.
The inflation rate later fell, but falling inflation does not reverse previous price increases. It means prices are increasing more slowly.
A household buying food in 2026 therefore remains exposed to the accumulated increase that occurred during the earlier inflationary period.
The Government’s most recent poverty statistics estimate that around 940,000 people in Scotland were living in relative poverty after housing costs during the 2022-25 reporting period. About 600,000 working-age adults were estimated to be in relative poverty after housing costs.
Food expenditure is unevenly distributed across household incomes. A household with little disposable income has less capacity to respond to higher food prices by reducing savings, postponing discretionary purchases or absorbing temporary increases.
That is the economic basis on which the proposed cap is being built.
Scotland is not proposing to cap every packet of bread or every bottle of milk
The consultation does not propose a universal maximum price for entire categories of food.
Ministers could define qualifying products with considerable precision.
A regulated product could be described by its weight, volume, ingredients, nutritional characteristics, packaging or whether it was fresh, frozen, tinned, loose or pre-packed.
A regulation could therefore apply to a specified size of milk container, a particular type and weight of bread, a pack of eggs meeting defined criteria or a category of pasta.
The Government is considering whether regulations should require every qualifying product within a category to meet the cap or whether retailers should instead be required to make at least one compliant product available.
The second model resembles approaches used elsewhere in Europe. A supermarket could continue selling more expensive branded versions while also carrying a regulated lower-priced product.
Food Standards Scotland has already begun examining what an essential basket could contain.
Its work uses dietary information from the 2024 Scottish Health Survey and the Eatwell Guide to examine foods commonly consumed in Scotland. It recommends excluding foods high in fat, salt and sugar from the capped basket and aligning product selection with nutritional guidance.
The process creates questions that do not arise in a conventional supermarket price promotion.
A government-defined basket has to accommodate different diets, allergies, religious requirements, household sizes and nutritional needs. It also has to deal with products whose costs vary seasonally.
Fresh vegetables do not have the same production economics throughout the year. Milk, eggs and meat carry different agricultural costs. Imported products are exposed to exchange rates and international supply conditions. A fixed statutory ceiling has to operate while those underlying costs continue moving.
The Government has not decided how the maximum price would be calculated
Several possible methods remain open.
Ministers could set the initial cap below the prevailing market price, creating an immediate reduction for shoppers.
They could base it on an average or median of observed supermarket prices.
They could establish a reference period and calculate the ceiling from historic prices.
The Government is also asking how prices should be adjusted after the cap is introduced.
This is one of the central technical problems in the policy.
A maximum price that never changes can become detached from production costs. A cap that changes frequently may provide little protection from inflation. A formula linked directly to market prices risks following the market it is intended to restrain.
Scotland would also have to decide whether the same regulated price should apply from central Glasgow to Shetland.
Retail distribution costs are not geographically uniform. Transporting refrigerated goods to islands or remote communities can cost more than supplying densely populated urban markets. National pricing is already common among major supermarket chains, but not every part of the grocery market operates on identical economics.
The consultation asks whether one price should apply across Scotland or whether geography should enter the calculation.
The supermarket profit argument is more complicated than the headline numbers
Political arguments over food prices regularly turn to supermarket profits.
Large grocery companies can report annual profits measured in hundreds of millions or billions of pounds because they process enormous volumes of sales.
Absolute profit does not show the amount retained from each pound spent by customers.
The Competition and Markets Authority examined grocery profitability during the earlier food inflation period. Its work found that operating margins among grocery retailers had fallen as costs increased. Average operating margins among the retailers examined declined from 3.2 per cent to 1.8 per cent in 2022-23, while operating profits fell by 41.5 per cent.
The CMA concluded that high grocery inflation at that stage was not being driven across the market by weak supermarket competition.
That finding did not mean every part of the supply chain was behaving identically.
The CMA later examined individual product categories and found that some branded suppliers had increased their unit profitability while prices were rising. It also found that consumers frequently switched from brands to cheaper own-label products.
Baby formula produced a particularly concentrated market problem. The CMA found substantial price increases and examined the relationship between supplier pricing, brand loyalty and consumer choice.
The food chain therefore contains several separate margins.
A farmer receives one price. A processor adds another set of costs. A manufacturer may add ingredients, packaging, labour and branding. A distributor moves the product. A supermarket adds retail costs and margin. In some sectors there may be wholesalers or intermediaries between those stages.
A legal ceiling imposed at the final retail stage does not remove costs further down that chain.
Farmers are already regulated through a separate system designed to correct bargaining power
The relationship between supermarkets and food producers has been the subject of UK regulation for more than a decade.
The Groceries Supply Code of Practice followed a Competition Commission investigation into the grocery market. The investigation found that some large retailers could transfer excessive risks and unexpected costs to suppliers, potentially reducing investment and innovation.
The Groceries Code Adjudicator was established in 2013 to enforce the code. It regulates relationships between designated large grocery retailers and their direct suppliers.
Its remit does not cover every farmer.
Many primary producers sell to processors, manufacturers or other purchasers rather than directly to supermarkets. Their commercial relationship may therefore sit outside the Groceries Code.
Additional legislation has since appeared in agricultural supply chains. The Fair Dealing Obligations (Milk) Regulations 2024 introduced mandatory requirements for milk contracts, including written terms and clearer pricing arrangements. Separate regulations have been introduced for the pig sector.
The Scottish food-price proposal would sit on top of this existing regulatory structure.
The Scottish Government has so far decided against writing direct producer protection into the illustrative Food Price Cap Bill.
Instead, the consultation proposes that ministers consider effects on farmers, crofters, fishers and other businesses when deciding whether to set or alter a cap.
Possible safeguards include monitoring farmgate prices, wholesale prices and margins; temporary exemptions during major supply disruptions; periodic impact assessments; producer consultation; and powers to amend or suspend controls if adverse effects appear.
Those measures are not yet statutory guarantees.
A cheap Scottish supermarket shelf could be supplied from somewhere else
The origin of capped products creates another layer of the policy.
Scotland imports food from the rest of the UK and internationally while also producing large quantities of meat, dairy products, seafood, cereals, vegetables and processed foods.
If a capped product can be sourced more cheaply from outside Scotland, a retailer operating under a maximum selling price has a commercial reason to consider the lower-cost supplier.
The Government’s own consultation acknowledges the possibility that consumers could switch from Scottish products to less expensive imported alternatives.
The same pressure can travel backwards through domestic purchasing contracts. If the shelf price is fixed while a retailer seeks to preserve its own margin, negotiations may move towards processors or suppliers.
The Government is asking consultees whether profits and margins can realistically be traced throughout different food supply chains.
In some products that can be difficult. Food may pass through several businesses, prices can be commercially confidential, contracts differ and commodity costs move continuously.
A policy designed around retail prices consequently requires information about production economics that government does not necessarily possess in real time.
Small shops would be outside the cap but still inside the market it creates
The proposed thresholds are intended to prevent independent shops and smaller grocery businesses from carrying the regulatory burden.
That does not remove the effect on them.
If a large supermarket is legally required to sell specified staples below a particular price, a smaller shop purchasing stock on less favourable wholesale terms may be unable to match it.
Convenience stores often have different property, distribution and purchasing economics from national chains.
The Government’s own impact assessment identifies smaller grocery retailers as businesses that could be indirectly affected.
This has a geographical dimension.
Some rural and island communities have limited access to major supermarkets. A policy applying only to large chains could produce substantial savings for households living near qualifying stores while providing little direct benefit where the local food network consists mainly of smaller businesses.
The Government is already considering whether retailer coverage might eventually need to be widened to improve accessibility in rural and island communities.
Widening it would transfer regulatory obligations to businesses the initial thresholds were designed to protect.
Local councils could be asked to police supermarket prices
The illustrative legislation proposes local-authority enforcement.
Councils could be required to monitor whether regulated goods sold in shops or online comply with the statutory ceiling.
The proposed model includes compliance notices, allowing a retailer an opportunity to correct a breach before further enforcement.
No final enforcement system has been chosen.
Local authorities already enforce substantial bodies of trading standards, consumer and food-related legislation. Their capacity varies across Scotland, and the proposed legislation would create another function requiring staff, systems and potentially specialist knowledge.
The Government’s impact assessment lists councils among the organisations directly affected by the proposal but has not yet produced the final cost of enforcement.
Any legislation would therefore require a financial settlement for the regulatory machinery as well as a method for calculating food prices.
The UK Internal Market Act remains part of the legal architecture
Food moves across the border between Scotland and the rest of the United Kingdom within a single internal market.
The United Kingdom Internal Market Act 2020 created two market-access principles for goods: mutual recognition and non-discrimination.
The Scottish Government’s current legal analysis treats a statutory food-price ceiling as a requirement governing the manner in which goods are sold.
On that analysis, the mutual-recognition principle is unlikely to nullify the price cap simply because a product was produced elsewhere in the UK.
The Act’s non-discrimination provisions remain relevant.
Those provisions can restrict requirements that directly or indirectly disadvantage goods connected with another part of the United Kingdom.
The Scottish Government says the final relationship with the Act will depend on the design ultimately chosen.
The Institute for Fiscal Studies has also examined the constitutional position. Its analysis concluded that the Internal Market Act does not automatically prevent Scottish food price caps, although affected businesses could have routes to challenge a scheme. Questions could also arise over the boundary between devolved powers and reserved consumer-protection law.
The consultation additionally identifies competition law, international trade rules and World Trade Organization obligations among the legal frameworks requiring consideration.
Other European governments have already tried versions of this policy
Scotland would not be the first European jurisdiction to intervene directly in grocery prices.
Croatia introduced caps in 2022 and subsequently expanded the number of products and product categories covered.
Its model includes both specific capped products and categories in which retailers must provide at least one item below the regulated maximum.
Hungary introduced retail price caps on staples including sugar, flour, sunflower oil and milk in 2022. Eggs and potatoes were later added.
The Hungarian retail price-cap regime ended in 2023 and was replaced first by mandatory discounting and later by restrictions on retailer profit margins for selected products.
Hungary’s intervention also generated litigation. In 2024, the Court of Justice of the European Union ruled that aspects of the earlier retail-price-cap system were incompatible with EU law because its market effects were disproportionate. The European Commission subsequently challenged Hungary’s profit-margin restrictions.
The Scottish Government includes these examples in its own consultation and does not present any of them as a model Scotland has decided to copy.
The international record instead shows several available mechanisms: fixing final prices, limiting margins, requiring discounts, mandating a low-price product within a category, controlling mark-ups or combining food intervention with tax measures.
The legislation could also change what Scotland defines as essential food
Government intervention normally approaches food through several separate systems.
Food Standards Scotland deals with safety, nutrition and dietary evidence. Agricultural policy supports production. Social security supports household income. Councils and charities operate parts of the emergency food system. Competition regulation governs markets and retailer conduct. Public-health policy attempts to change consumption patterns.
A statutory essential-food basket would connect several of these systems in legislation.
Ministers would have to decide which foods qualify for public protection from price increases.
Food Standards Scotland recommends alignment with the Eatwell Guide and the exclusion of high-fat, salt and sugar products. Its analysis uses actual Scottish consumption data rather than constructing a theoretical diet without reference to what households buy.
The legislation could therefore turn nutritional advice into part of retail economic regulation.
That creates practical choices. White and wholemeal bread do not have identical nutritional profiles. Fresh, frozen and tinned vegetables can all form part of a balanced diet but have different cost structures. Meat and fish have varying prices and cultural roles. Plant proteins, dairy products and substitutes raise questions about dietary inclusion.
The Government also has to decide whether a regulated basket should reflect what Scottish households currently eat or attempt to change what they eat.
A price cap treats one part of food poverty: the price
Scotland’s food affordability problem is not created by food prices alone.
Household income, rent, mortgage payments, energy bills, disability costs, childcare, transport and debt determine how much money remains available for food.
Two households encountering the same supermarket prices can therefore experience very different levels of food security.
The proposed legislation addresses the price side of that equation. Social-security policy, wages, taxation and housing costs sit elsewhere.
Its eventual effect will depend partly on the size of the capped basket and partly on the gap between the regulated price and the price consumers would otherwise have paid.
A basket containing a small number of already inexpensive own-brand staples would have a different household effect from a broader basket with substantial mandated reductions.
The financial benefit would also vary according to what households buy.
Those decisions have not been made.
The consultation is now asking Scotland to design the mechanism
The proposal that entered the election as a commitment to cap the prices of essential groceries has become a series of more specific policy choices.
Which foods qualify.
Which retailers qualify.
How the maximum price is calculated.
Whether the same ceiling operates everywhere in Scotland.
How frequently it changes.
How farmgate and wholesale prices are monitored.
How product shortages are handled.
How independent retailers are affected.
How councils enforce it.
How Scottish products compete with imports.
How the legislation operates inside the UK internal market.
How nutritional policy enters the selection of food.
And how government determines whether the intervention has reduced household food costs without transferring those costs elsewhere.
The Scottish Government has not claimed those questions are settled. Its own partial impact assessment identifies possible changes in product availability, effects on competition, administrative costs and impacts throughout the supply chain. It says no preferred option has yet been selected.
The consultation closes on 25 November 2026.
If legislation follows, Scotland will be moving into an area of economic regulation it has not previously used: government setting a legal maximum price for ordinary food sold on supermarket shelves.
The eventual legislation will determine whether that becomes a limited requirement to keep a small number of basic products available at controlled prices, or a broader intervention in the economics of Scottish food retail.
SOURCES
- Scottish Government — Price controls on essential food items: consultation paper, 1 September 2026.
Price controls on essential food items: consultation paper - Scottish Government — Chapter 6: Protection for primary producers, 1 September 2026.
Protection for primary producers - Scottish Government — Chapter 7: Compliance and enforcement, 1 September 2026.
Compliance and enforcement - Scottish Government — Chapter 9: Future operation of any scheme and wider considerations, 1 September 2026.
Future operation and wider considerations - Scottish Government — Related publications, including the Partial Business & Regulatory Impact Assessment and international examples.
Price controls: related publications - Food Standards Scotland — Fair Food Price Caps, 1 September 2026.
Fair Food Price Caps - Food Standards Scotland — Price controls on essential food items, including analysis of 2024 Scottish Health Survey dietary data, 1 September 2026.
Price controls on essential food items — FSS research - Competition and Markets Authority — Competition and profitability in the groceries sector.
Competition and profitability in the groceries sector - Competition and Markets Authority — Cost of living: groceries sector update.
CMA groceries sector work - Groceries Code Adjudicator — Groceries Supply Code of Practice.
Groceries Supply Code of Practice - UK legislation — Fair Dealing Obligations (Milk) Regulations 2024.
Fair Dealing Obligations (Milk) Regulations 2024 - UK legislation — United Kingdom Internal Market Act 2020.
United Kingdom Internal Market Act 2020 - Institute for Fiscal Studies — The Scottish Government faces a fiscal reckoning – with spending cuts or tax rises on the way, 2026.
IFS analysis of Scottish Government policy, including food price caps - Institute for Fiscal Studies — Funding, spending, taxes and benefits in the 2026 Scottish elections.
IFS 2026 Scottish election analysis - Scottish Government — Poverty and Income Inequality in Scotland 2022–25.
Poverty and Income Inequality in Scotland - Trussell — Hunger in Scotland.
Trussell research and reports
