Food price cap will remain in effect for 3 months but can be extended

The decision on capping prices will remain in effect for three months but can be extended, the prime minister’s chief of staff said. Gergely Gulyás said the reason last October’s prices were used as the reference for the cap was that there had been no inflation pressure then and “nobody was complaining yet” about prices at the time. Gulyás said that hopefully the measure would make life easier for those struggling to make ends meet. He noted that the price of sugar, wheat flour, sunflower-seed oil, pork leg, chicken breast and milk with 2.8 percent fat will be reduced to their price on Oct. 15 last year.

Retailers must stock the products in question and “a multi-level, strict system of penalties” for rule-breakers included a possible ban on trading, he said. The decree to be published within the next few days will stipulate fines against violators at the earliest stage, he added. In response to a question, he said it was a reasonable cause for concern that retailers may counterbalance the loss resulting from the new measure by raising other prices. The government will monitor the developments, he added.

The government also has access to other means of regulating prices, he said, adding that Hungary’s legal system recognised the institution of centrally regulated prices.

In response to a question, he said

the government would not compensate retailers for a shortfall in their revenues stemming from the rollback of food prices.