Scottish food sourcing holds firm as farmers warn over supermarket price caps

Scottish farmers could lose valuable supermarket shelf space to cheaper imports if proposed food price caps go ahead, NFU Scotland has warned, despite encouraging figures showing strong support for domestic produce.

The union's latest ShelfWatch audit found that 26% of own-label products surveyed across major supermarkets were sourced from Scotland, rising to 89% when produce from elsewhere in Britain was included.

Published on Tuesday 27 October, the findings are based on an examination of more than 20,000 products across 73 stores operated by eight major supermarket chains.

NFU Scotland welcomed the results but warned that government plans to introduce price caps on essential foods could undermine domestic producers.

The latest audit found improvements in Scottish sourcing across all eight retailers, with Aldi and Lidl recording particularly strong results.

Aldi topped the survey, with 68% of its own-label products sourced from Scotland, followed by Lidl at 51%.

Co-op and Marks & Spencer both recorded Scottish sourcing levels of approximately 30%, while Tesco reached 23%.

The findings highlight considerable differences in how major retailers support Scottish farmers, crofters and growers through their purchasing decisions.

Across the wider survey, Scottish sourcing improved in several important food categories, including chicken, fresh pork, vegetables and soft fruit.

Milk and eggs continued to show particularly strong levels of Scottish sourcing.

The latest figures indicate an encouraging trend compared with the 19% Scottish sourcing recorded at the same point last year.

However, NFU Scotland cautioned that changes to the ShelfWatch methodology mean the results should not be treated as directly comparable year-on-year figures.

Its previous annual report, published in February 2026, also recorded Scottish sourcing at 26%, although it covered a different audit period and sample.

The latest findings therefore provide an updated picture of supermarket sourcing rather than definitive evidence of an increase since February.

The percentages also refer to products examined during the audit, rather than the proportion of supermarket sales or spending going directly to Scottish producers.

ShelfWatch monitors the sourcing, visibility and labelling of Scottish food across Aldi, Asda, Co-op, Lidl, Marks & Spencer, Morrisons, Sainsbury's and Tesco.

The initiative is intended to assess how effectively retailers support domestic agriculture and identify opportunities to increase Scottish produce on supermarket shelves.

Despite welcoming the latest findings, NFU Scotland expressed concern about the potential consequences of government intervention in supermarket pricing.

The Scottish Government is consulting on proposals to introduce legal price caps on selected essential food products, including bread, milk and eggs.

The proposals are intended to make basic groceries more affordable for households struggling with the cost of living.

However, NFU Scotland fears the measures could encourage supermarkets to purchase cheaper imported products rather than food produced by Scottish farmers.

If retailers are required to meet fixed selling prices, the union believes they could seek to protect their margins by reducing purchasing costs.

That pressure could then be passed through processors and suppliers to primary producers, potentially reducing the returns farmers receive for their products.

NFU Scotland president Andrew Connon welcomed the latest ShelfWatch findings but warned against taking improvements in domestic sourcing for granted.

"But this progress cannot be taken for granted," he said.

Mr Connon raised concerns that proposed price caps could make imported food more commercially attractive, potentially displacing Scottish produce from supermarket shelves.

He also stressed the importance of maintaining economically viable farming businesses and reliable markets for Scottish agricultural products.

The union believes retailers have a responsibility to support domestic supply chains, particularly when farmers face rising production costs and volatile agricultural markets.

Concerns about the proposed price controls extend beyond the farming industry.

In August, 23 business and trade organisations jointly urged First Minister John Swinney to abandon plans for statutory food price caps.

The organisations included the Scottish Retail Consortium, Food and Drink Federation Scotland, Dairy UK, Scottish Bakers and NFU Scotland.

Their joint letter warned that the proposed measures could create further problems for retailers, food manufacturers, agricultural producers and consumers.

The signatories described the proposed statutory price cap as "unnecessary, ineffective, and likely to deliver significant adverse consequences".

They argued that limiting retail prices would not address underlying production and distribution costs, including energy, fuel, fertiliser and employment expenses.

Instead, the organisations warned that price controls could increase costs elsewhere in the supply chain and potentially result in higher prices for other household products.

Scottish Retail Consortium director David Lonsdale was among the signatories, alongside NFU Scotland president Andrew Connon.

The letter called for the government to work with retailers and food producers to address the underlying factors driving grocery inflation.

The industry intervention adds weight to concerns that price controls could have unintended consequences for Scottish agricultural businesses.

However, the Scottish Government maintains that action is needed to help households afford essential food.

Business minister Tom Arthur has previously said that rising living costs are leaving too many families struggling to afford their weekly shopping.

He explained that the government's objective is to improve access to affordable and nutritious food while supporting a competitive and sustainable food industry.

The government's consultation also acknowledges that price caps could affect businesses throughout the supply chain, including farmers, processors, wholesalers and retailers.

It recognises concerns that supermarkets might seek lower-cost alternatives to maintain margins, potentially increasing demand for imported products.

Ministers are therefore seeking evidence on how any future scheme could protect primary producers and avoid damaging Scottish food production.

Options under consideration include monitoring the financial consequences for producers and examining whether additional safeguards may be necessary.

The government has not yet introduced the proposed caps, with the consultation remaining open until 24 November 2026.

NFU Scotland is urging policymakers to consider the consequences for food production before proceeding with any measures affecting supermarket prices.

Beyond pricing, the union also highlighted concerns over competition from imported food produced under different standards.

Scottish farmers must meet requirements covering areas including animal welfare, environmental protection and food safety, which can influence production costs.

NFU Scotland believes domestic producers should not be placed at a disadvantage when competing against imports produced to different standards at lower cost.

Country-of-origin labelling remains another concern, with the union calling for clearer information about where supermarket products are produced.

It wants shoppers to be able to identify Scottish food more easily and make informed purchasing decisions.

The union also raised concerns about the food service and hospitality sectors, where information about the origin of ingredients can be less readily available.

It believes greater transparency across restaurants, hotels and catering businesses would help establish how much Scottish produce is being used outside supermarkets.

NFU Scotland argues that strong domestic sourcing supports not only individual farms but also rural employment, food processing and long-term supply chain resilience.

These issues are expected to feature at the union's forthcoming Autumn Conference, where the future of Scottish food production will be a central theme.

Although the latest ShelfWatch findings highlight encouraging support for Scottish produce, the union believes maintaining that progress will depend on fair returns for farmers and continued retailer commitment.