Food prices could fall in independent Scotland says supermarket giant


  By Martin Kelly

Claims that supermarkets are planning to increase food prices if Scotland votes Yes in the independence referendum have been dismissed by one of the big four supermarket giants.

Morrisons has described media reports that they are preparing to hike prices in their Scottish Supermarkets as “wrong” and have revealed that the price may in fact fall if Scots vote Yes in 2014.

Asked by Newsnet Scotland if the reports of a price hike, which were circulating in the media yesterday, were accurate and the company was making plans to increase prices in an independent Scotland, a spokesman said:

“On the issue of Scottish independence, we believe is for the people of Scotland to decide. It would be wrong to say Morrisons is predicting higher food prices at this stage if Scotland voted for independence.”

A row has broken out after the Financial Times reported that supermarket chains, including Morrisons, had drawn up plans to raise prices in the event of a Yes vote.

According to the newspaper: “Scottish consumers will pay more for food if they vote for independence in next year’s referendum because Britain’s big supermarket chains plan to raise their prices north of the border,”

The article reported Dalton Philips, chief executive of Wm Morrison as saying: “If the regulatory environment was to increase the burden of the cost structure on business, that would potentially have to be passed through to consumer pricing, because why should the English and Welsh consumer subsidise this increased cost of doing business in Scotland?”

However in a clarification statement issued to Newsnet Scotland, a spokesman for the company admitted that prices could in fact fall if Scotland were to become independent.

“Our view is that if an independent Scotland increased or decreased regulation or taxes we’d have to take a second look at our pricing. Clearly that could work for or against Scottish customers depending on the direction of travel.” Julian Bailey added.

The Financial Times article featured across the Scottish media including the BBC with the broadcaster publishing an online article headlined ‘Food price rise alert for Scotland’.

According to the BBC, “Some of the UK’s biggest supermarkets may consider increasing their prices north of the border, should Scotland vote for independence next year.”

The apparent threats of a price hike were welcomed by Unionist politicians.  Margaret Curran, Labour’s shadow Scottish secretary, said: “I’ve heard time and again from businesses about the benefits they get from being part of the UK and how these benefits are passed on to their customers.  These comments show again why we’re better together.”

However the story was soon being challenged with Tesco denying they had spoken to the Financial Times and Asda joining Morrisons in saying they had no plans to increase prices.

Commenting yesterday, Scottish Rural Affairs Secretary Richard Lochhead said:

“This story has quickly disintegrated – Tesco made it clear to the BBC this morning that they have made no such comments regarding independence, while Asda and Morrisons have both said that they have no plans to increase prices.

“The No campaign’s claims have completely backfired, as Asda have also made clear that their comments also apply to the powers devolved to Scotland in the 2012 Scotland Act – something brought in by the Westminster parties in advance of independence!

“The reality is that independence will provide the means to create a prosperous economy and better business environment, one that will deliver benefits for consumers and retailers alike – and supermarkets can look forward to a thriving future in Scotland under all constitutional circumstances.

“Supermarkets operate in competition with each other, and you can be sure if one supermarket chain has higher prices – for whatever reason – then their competitors will not be slow to take advantage of that.”

The Financial Times story yesterday featured on BBC Radio Scotland’s morning programme Good Morning Scotland with presenters reading our hedlines from a number of newspapers including the ultra pro-Union Daily Mail.

The issue also featured on BBC’s The One Show with a presenter claiming that Supermarket food prices will go up in an independent Scotland.

The comments from Morrison’s indicating that the claims are wrong and that prices may in fact fall with independence, are not expected to be reported by the BBC.