Despite warnings from the Scottish Grocers’ Federation (SGF) that a price cap on essential food items could “decimate” local shops, the Scottish Government has included the Food Prices (Scotland) Bill in its Year One Legislative Programme and launched a consultation on the proposals.
The proposals currently target large supermarket chains and would apply to businesses with more than 250 employees; annual turnover above £250m; andmore than 50% of turnover from grocery sales.
However, the Government is seeking views on whether the policy should also apply to unaffiliated, franchise and symbol stores.
ScotGov is also considering whether supermarket convenience formats may be included.
The consultation recognises concerns that local stores could be put at a competitive disadvantage if supermarkets are required to sell staple items at capped prices while smaller retailers are not able to match them. Conversely, it also notes that if small stores were included within the scope, they would find it harder to implement than larger outlets.
The consultation is seeking views on:
- which foods should be capped
- how price caps should be set
- which retailers should be covered
- enforcement arrangements
- protections for producers and supply chains
You can respond to the consultation here by 24 November 2026.
SGF Chief Exec, Dr Pete Cheema OBE, said: “If these measures are brought forward in their current form, they could decimate hundreds of small local businesses operating under a symbol group. It would be deeply damaging and entirely perverse if a policy intended to help consumers instead contributed to the closure of the very businesses their communities rely upon.
“Even for out-of-scope retailers, price caps on selected products will inevitably distort competition and have serious consequences for independent local businesses. Risking pulling customers away from local shops and encouraging them to travel further to out-of-town supermarkets for everyday essentials.
“Local stores are not simply another place to shop. They are the backbone of many communities — providing essential and often lifeline goods and services, supporting local jobs, keeping money within the local economy and, crucially, serving people within walking distance of their homes.
“Independent retailers are already facing unprecedented pressure from rising costs, additional government regulation and global economic uncertainty. They must not become collateral damage in a policy intended to target ‘large’ businesses.”
Ewan MacDonald-Russell, Deputy Head of the Scottish Retail Consortium (SRC), was equally scathing of the proposals.
He claimed that the lengthy consultation paper showed “how fiendishly complex, costly, and onerous this unnecessary exercise will be if it is implemented”, claiming that the rules on product substitution risked shortages on the shelves.
He added: “Ministers have fluffed the chance to provide the clarity retailers and the supply chain have repeatedly asked for. They should scrap the cap and work with industry to get on top of inflation – including public policy costs.”
Association of Convenience Stores (ACS) chief executive Ed Woodall also criticised the price cap plan.
He said: “Local shops operate in an intensely competitive market and, despite rising cost pressures, are working hard to offer customers the best possible value. Retailers need support with managing the cost of trading, rather than introducing opaque price controls that will have a detrimental impact across the whole supply chain.”
The consultation launch follows an open letter sent to First Minister John Swinney at the end of August urging the Scottish Government to abandon the proposal. It was signed by 23 business representative groups including SRC, SGF, ACS, The Federation of Independent Retailers and Food and Drink Federation Scotland.
