Theo Paphitis slams ‘headline-grabbing and insincere’ food price cap scheme

Dragons’ Den star and retail tycoon Theo Paphitis has dismissed the government’s rumoured proposal to curb rising food prices as “another one of those hair-brained, headline-grabbing, insincere schemes.”

Speaking to Startups this week, Paphitis – who is Chairman/Owner of retail giants Ryman, Robert Dyas, and Boux Avenue – rubbished the policy. He claims that the government is “using the idea as a distraction knowing full well that it’s not viable.”

Earlier this week, the government received backlash from UK retailers and supplier bosses over a plan to cap prices for basic foods such as bread and milk.

The latest official figures show food inflation reached 19.1% year-on-year in April, a near record increase. The rate is higher than inflation in the wider economy (8.7%) and has put pressure on the government to get a grip on the upsurge.

Elaborating further, Paphitis warns that, as the cost of raw materials continues to rise, the move could prove counterproductive. He argues it could lead to even higher price tags down the supply chain, which would put strain on small partners and retailers.

“If you fix prices at a point in the chain and input costs aren’t going down, something somewhere else in the chain has to give,” he states. “This will result in food shortages which in itself will increase costs.”

Paphitis calls for business rates reform for small firms “teetering on the edge”

Alongside managing his business portfolio, Paphitis is a prominent campaigner for UK SMEs.

In 2011, he created the support network, #SBS Small Business Sunday. Capitalising on the large Twitter following he gained from starring on Dragon’s Den, the retail tycoon shares six small businesses on Twitter each week, to help boost their social media presence.

“I realised just how useful being able to market to 50,000 people would have been when I was starting out,” Paphitis tells Startups.

SBS has since grown to become one of the UK’s leading small business networks. It has also become a particularly valuable source for SMEs in the current, poor economy.

Many UK SMEs are struggling to stay afloat amidst a cocktail of hiked energy bills, talent shortages, and the cost of living crisis. Startups asked Paphitis what he thought the UK government should be doing to help small businesses balancing on today’s economic tightrope.

“Small businesses are teetering on the edge at the moment,” he cautions. “The government can start to help by throwing them a life raft to alleviate the burden that our archaic business rates taxation system puts on brick-and-mortar retailers.”

Industry leaders have been lobbying for the government to make the business rates system – specifically the way rates are calculated – more transparent for years.

New rateable values were introduced at the start of the new financial year. On average, the total value on non-domestic properties in England and Wales increased by an average of 7.1%.

In early April, Whitehall announced the new Non-Domestic Rating Bill 2022-23, which introduced a range of minor amendments to business rates. However, critics said the changes did not go far enough.

Entrepreneur partners with NatWest for ‘State of the Nation’ roundtable

Paphitis’ views on how the government could better support small companies were aired to Startups ahead of a roundtable being held to discuss some of the pressing issues facing today’s SMEs.

The roundtable is open exclusively to the 3,750 small business owners who have won the #SBS Small Business Sunday award so far. Paphitis has teamed up with long-standing partner NatWest to host the event in London on Thursday June 29.

Six chosen firms will be hosted at the NatWest Group headquarters. They will have the chance to have lunch with Paphitis and members of his team, as well as NatWest representatives.

Off the back of the working lunch session, the SBS State of the Nation report will share findings and expert advice for small firms, to help brighten the present, unfavourable business outlook.

Commenting on the upcoming roundtable, Paphitis describes SMEs as the lifeline of the UK economy: “This event is a fantastic opportunity for #SBS small business owners to come together and get under the bonnet of small business, sharing their experiences so that they can learn from each other and navigate the choppy waters we are currently facing.”

Debbie Lewis, Regional EcoSystems Manager, at NatWest, adds: “We look forward to working with #SBS Small Business Sunday to continue to champion the entrepreneurial journey, supporting aspiring individuals as they transform their visions into reality.”