The government published a new decree concerning compulsory price reductions in big supermarkets in Hungary. The Orbán administration shared the product categories in which they want a price decrease and cleared that if the companies do not follow the new rules, authorities may fine or even close them.
According to portfolio.hu, the government’s relevant decree was published in the Hungarian Gazette (Magyar Közlöny) yesterday evening. It says that the newly introduced compulsory price reduction period will be between 1 June and 30 September and applies to supermarkets with a net income exceeding HUF 1 billion (EUR 2.66 million) in 2021. Moreover, the retailer has to introduce 24-hour-long price reductions or 168-hour-long ones. Furthermore, it concerns even mail orders.
The decree says that retailers should decrease prices of the following products: poultry, pig, beef and other kinds of meat, fish, canned fish, processed meat products, milk, sour cream and replacements, yoghurt and similar products. Furthermore, supermarkets will have to reduce 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.
All supermarkets concerned
The decree prescribes a minimum 10 percent price decrease of at least one of the aforementioned products at least each week between 1 June and 30 September. The price base should be the lowest price of the given product at which the retailer purchased it in the preceding 30-day-long period. The retailer must mark the fact of price reduction and its extent.
Furthermore, the retailer should stock at least as many products as the one(s) concerned by the price reduction scheme as it sold average in 2022. That means they will not run out of promotional items.
Authorities will monitor all supermarkets from 1 June and can fine them. The sum may fall between HUF 500,000 and HUF 3 million (EUR 1331 – 8,000). However, the worst-case scenario for the supermarkets is a permanent closure provided they breach the new rules seriously.
This government is a complete joke. Its’ policies have given Hungary the highest inflation rate in Europe and it responds by interfering in the market economy which will make things worse. What was the result of its’ decree on gasoline prices last year? It was a gasoline shortage and closure of many stations. In many areas of the economy the Orban government has forced businesses to sell themselves to its’ connected friends giving these Fidesz oligarchs concentrated control over various industries and thus the ability to raise prices due to lack of competition. The cement industry is a major one with the German owners of Duna-Drava being attacked by the government to force its’ sale. Look for the Der Spiegel report on that. Less competition and concentration into Fidesz oligarch hands means higher prices and that is a major reason why Hungary has the highest inflation. Of course you can instead be a sheep and believe what Orban and Szijjarto tell you about sanctions.
I wonder if CBA and Prima will be forced to do this as well. Or is it just foreign owned markets? Hmm, already chasing foreign construction material companies out and nationalizing the materials. Hungary really is heading back to communism under Fidesz. Not a surprise really, they never understood democracy.
Pretty scary when Politicians are forcing commercial enterprises to sell at a loss. Economically, price controls have long been debunked – they’re generally ineffective. https://www.economicshelp.org/blog/621/economics/price-controls-advantages-and-disadvantages/ – and it’s defensible that it was the Politicians’ price controls that got our inflation to the where it is, now (the highest in the EU).
Looks good for the masses, though. Playing to the crowd?
They do it anyway each week (Ackcioujsag). But it’s a good propaganda for the idiots that vote for the Victator.