Key insights
- Sainsbury's CEO urges UK government intervention to mitigate rising energy costs in the food sector, aiming to curb grocery inflation. The call follows concerns about the impact of geopolitical events on energy prices and warnings of potential double-digit food price increases. While primarily focused on the UK, sustained global inflation could indirectly impact US equities.
Investing.com -- The British government should intervene to support the food sector against high energy costs stemming from the Iran war to help control grocery inflation, Sainsbury’s CEO Simon Roberts said on Thursday.
Britain faces significant exposure to the energy price surge that followed U.S.-Israeli attacks on Iran beginning at the end of February. UK finance minister Rachel Reeves has said her focus during the war is keeping costs down for consumers and businesses.
Roberts, who leads Sainsbury’s with its 15.6% share of the UK grocery market behind Tesco (LON:TSCO), noted that other energy-intensive industries had already received government support. He said the entire food sector, including farmers, growers, producers, manufacturers and retailers, needs help with rising energy bills.
"The single biggest thing the government could do to help support keeping food prices down is to make sure that energy costs of the industry are not rising faster," Roberts told reporters after Sainsbury’s reported full-year results.
"Now is the time for government to really look at what they can do ... Now is the time to look at what’s possible in the food (farming), manufacturing, processing and retailing sectors," he said.
UK food inflation rose to 3.7% in March, according to official data. The Food and Drink Federation has warned food prices will be rising by almost 10% by December. Tesco said last week it did not recognize that number.
Roberts said Sainsbury’s focus was on keeping prices as low as possible.
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