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UBS accuses supermarkets of unfair food price hikes
Business digest: Report suggests UK food costs are out of sync with US and Europe prices
Supermarkets are raising food prices by double the rate that current inflation rates justify, according to a new report by Swiss bank UBS.
The bank's analysis suggests a 3-3.5 per cent commodity price increase as appropriate, but supermarkets have raised prices by around 6-6.5 per cent. This has apparently added between 0.3 and 0.5 per cent to the consumer prices index (CPI) of inflation, which is currently at 4 per cent.
As a result, food prices in Britain are rising by 4.9 per cent, compared with 1.5 per cent in the US, and a 1.8 per cent Eurozone average. The weak pound has also been a contributing factor.
Paul Donovan, one of the UBS economists who wrote the report, said that supermarkets may face a competition inquiry for "rising in excess of justifiable cost increases".
The British Retail Consortium denied the accusations, claiming that "supermarkets are shielding customers from the full impact" of commodity price increases.
Read a full report at the Daily Telegraph. ·
