Hungary’s government will introduce profit-margin caps on a range of food products from mid-March to curb rising supermarket prices, Prime Minister Viktor Orbán said on Tuesday.
Budapest is once again turning to price controls to ease the burden on consumers’ wallets following a wave of discontent over food costs in Central and Eastern Europe.
“That’s enough!,” Orbán said in a video posted on social media on Tuesday in which he promised to end “excessive and unjustified” price hikes.
The prime minister said that between mid-March and the end of May the government will monitor that the commercial mark-up on 30 basic foodstuffs does not exceed 10% of the wholesale price. The basket of products includes chicken, milk, oil, butter, eggs, yogurt and sugar.
He did not rule out extending the measure beyond May.
Orbán added that the government had failed to reach an agreement in talks with food retailers in recent days. “Unfortunately, the retailers’ offers were far below our expectations,” he said in the video.
The announcement came on the same day that Hungary’s Central Statistical Office said food inflation reached 7.1% year-on-year in February. The biggest rise was in flour, which jumped 44.3%.
Early warnings
Orbán’s government has repeatedly resorted to price controls to combat soaring inflation.
Hungarian Economy Minister Nago Márton had hinted at imminent price controls last month, following a series of supermarket boycotts in the Balkans.
Hungary’s competition watchdog had also warned food producers and processors to stop coordinating price rises.
But the government’s move is expected to face stiff opposition. Last year, a 2022 decree setting regulated prices for a range of food items resulted in the government being rebuked by the EU’s top court, which found it undermining fair market competition in the EU.
[ADM/EPD]