FT - James Lowman, chairman, ACS

ACS chief executive James Lowman

Food retail and manufacturing bodies have warned that new Welsh government health proposals could increase food prices for consumers.

In a letter sent to Lynne Neagle, the deputy minister for mental health and wellbeing, the industry bodies are calling for the Welsh government to heed their concerns on proposed regulations which will have negative consequences for Welsh producers, while limiting choice for consumers and increasing prices when inflation is at an 18-year high.g

The calls come as the Welsh government looks to introduce legislation to set rules for what products can be sold on promotion such as buy one get one free deals, and in prime positions such as store entrances and end of aisles.

While the regulations being considered by the Welsh government are similar to recent legislation in England, industry has stressed their concern with proposals for additional diverging restrictions including bans on temporary price reductions (such as 50% off), meal deals and further locations in store (such as island displays).

In a joint letter to the minister, industry bodies have outlined how the proposals have the potential to increase food prices for consumers compared to other parts of the UK, while reducing availability of some products.

They say the proposals will also have a negative impact on the supply chain and new product development for Welsh producers, and to lead to increased waste.

ACS chief executive James Lowman said: “Convenience retailers are facing huge cost increases this year with energy bills, labour costs and product prices all going up. The proposed HFSS rules in Wales are unnecessarily inconsistent with those already agreed in England, putting additional pressure on retailers to start from scratch on store layouts at the cost of thousands of pounds.

“If the Welsh government decides to proceed with these regulations, we urge them to exempt temporary price reductions and meal deals from the restrictions, as these help customers to save money and feed their families while ensuring fair competition across both Wales and England.”

Sara Jones, head of the Welsh Retail Consortium, said: “The Welsh retail industry is committed to helping consumers make healthier choices. Fresh fruit and vegetables are heavily price promoted and often the very first thing shoppers see when entering food retailing stores.

“The availability of healthy snack alternatives has risen considerably, and the quantity of fruits and vegetables in products like sandwiches and ready meals has increased. Our industry has led the way on reformulating products to reduce salt, sugar, and fat from products. We’ve pioneered traffic light labelling and clear energy information on products and signage to help consumers understand products and make informed choices.

“We are particularly concerned over plans to restrict price promotions and to ban meal deals. Promotions within categories allow retailers and brands to compete to attract customers, improving competition and keeping prices down. With inflation running at a 18-year-high it would be regressive and irresponsible to put up costs in this manner with no evidence at this time that it would significantly improve public health. We hope Welsh Ministers will keep consumers in mind as this process continues over the coming months.”

Food and Drink Federation Cymru director of strategy and devolved nations, David Thomson, said: “The Welsh government must ensure that any policy does not increase the cost of food for the people of Wales at a time when households across the country are struggling to make ends meet. In addition, it is critical that Welsh food and drink manufacturers have a level-playing field with their competitors in other parts of the UK.”