Price cap scheme ends after 17 months, significant price drops come in Hungary

The Hungarian government introduced a so-called compulsory price reduction scheme on 1 June. The measure concerned 20 food products e.g. sugar, milk, flour, chicken breast, cereals, fresh vegetables and fruits. The Orbán administration aimed to communicate that they continue to help Hungarian shoppers after the food price cap scheme’s abolishment on 1 August. However, food (and fuel) is still one of the most expensive in the region. Therefore, many Hungarians do their shopping in neighbouring Slovakia or Romania.

We reported on the Hungarian government’s unique compulsory price reduction scheme in THIS article. The two main reasons for its introduction are the abolishment of the food price cap scheme, which went into effect in February 2022 before the general elections, and the soaring food prices with the highest rate in the European Union. The food price rise rate slowed down in Hungary in the last few months but it is still high. In June, it exceeded 29.3 percent. That means basic foodstuffs cost 29.3 percent more than in June 2022. That is a significant surge, the EU’s highest.

Since the government could no longer uphold the food price cap on several food products, they decided to “force” supermarket chains to introduce compulsory 10 percent price reductions. They named 20 food products, including poultry, pork, beef and other kinds of meat, fish, canned fish, processed meat products, milk, sour cream and replacements, yoghurt and similar products. Furthermore, supermarkets were compelled to lower the price of cheese, butter, margarine, vegetable oils and animal fats, bread, pastries, cereals, flour, sugar, fresh vegetables and fruits, vegetable and fruit juices, convenience foods, spices, seasonings, coffee, tea, mineral water and soft drinks from 1 June. Needless to say, food chains in Hungary regularly come up with special deals just like in any other country, so the measure seems only to be an element of the government’s success propaganda.