A wave of discontent over rising supermarket prices has spread through the Balkans and beyond in the past weeks, intensifying pressure on governments to defend consumers.

At the latest meeting of EU agriculture ministers in Brussels on 27 January, a coalition led by Slovakia, including Bulgaria, Croatia, Hungary, Lithuania, Romania, and Slovenia – blamed multinational food companies for abusive pricing strategies and urged the Commission to act. 

Despite this push for stronger consumer protections in Brussels, domestic unrest continues to grow.

It all started at the end of January with a supermarket boycott in Croatia that slashed sales by almost 50%. I was followed by smaller-scale protests in Slovenia and calls by Bulgarian civic groups for action today.

The discontent reached Greece, where the Greek Federation of Consumers INKA condemned the “mockery, deception, profiteering, and speculation at the expense of consumer citizens” and called for boycotts next Wednesday. 

In Romania, pro-Russian populist and former presidential candidate Călin Georgescu weighed in last week by urging citizens to shun foreign-owned supermarkets, a move that Agriculture Minister Florin Barbu slammed. “I ask everyone to keep their paws off Romanian farmers and processors,” he said.

To avert further discontent, Lithuania set up a new body to monitor food prices last week, and Hungary’s competition watchdog warned food producers and processors on 30 January to stop coordinating price hikes.

A common malaise 
While governments in affected countries have acknowledged consumer frustration, some have pointed out that their food prices do not top EU rankings.  

“Is it actually true that we have the most expensive foods in all Europe?” asked Slovakian Agriculture Minister Richard Takáč in a video of him shopping in a local supermarket.

Historically, food prices in these member states have been lower than the EU average, but food inflation has risen at a significantly higher rate, said Michele Galli, a visiting fellow at the European Policy Centre and agri-food expert. 

Price increases feel all the more painful when households allocate a larger share of their income to food, which is the case in most of these countries.  

But this may not be the only reason. Nina Vujanovic, a researcher on the economic implications of EU accession at Bruegel, said that Croatia’s heavy reliance on tourism, which largely determines food demand, makes the country more vulnerable to external shocks such as fluctuating food prices.  

Meanwhile, supermarkets are pointing the finger at food suppliers.  

“Retailers cannot get the best deal in the single market because large manufacturers are using territorial supply constraints,” said Eurocommerce. “This enables large manufacturers to keep prices higher in certain countries.” 

FoodDrinkEurope, representing the European food and drink industry, declined to comment when asked about the accusations.   

The easy way out? 
With food costs squeezing budgets, many Central and Eastern European countries are debating imposing price caps to ease the pressure on consumers’ wallets. 

In Croatia, supermarket boycotts led the government to limit the prices of 40 food items, building on price caps introduced on 30 products last September.  

Opposition parties in Bulgaria urged Prime Minister Rosen Zhelyazkov last week to follow suit, though he refused to do so. Describing direct state intervention in the market as “inadmissible,” Zhelyazkov said that price ceilings could lead to shortages of basic goods.  

Hungary and Romania have both used price and margin caps in recent years. Hungarian Economy Minister Nago Márton hinted at reintroducing price ceilings last week. “If necessary, we will intervene immediately,” he said.  

Last year, however, price controls on basic foodstuffs cost Budapest a rebuke from the EU’s top court, which found the government guilty of undermining fair market competition.  

[ADM/MM]