- Published: 03.01.2023.
Price increases because of euro changeover unacceptable
Economy Minister Davor Filipović said after meeting with representatives of retail chains and associations on Tuesday that increasing prices because of the changeover to the euro was unacceptable and that the government would do all in its power to protect people's living standards.
"What I've told the retail chains today, and what I am telling those who will try to take advantage of the changeover to the euro and make a profit at the expense of our citizens, is that they will not get away with it and that the government will do all in its power to protect the citizens' living standards," Filipović told the press, adding that all measures are on the table, from blacklists to a price freeze on consumer goods.
He said they had discussed the continuing increase in the price of food and non-alcoholic beverages and the kuna to euro conversion.
Filipović said that inflation currently stands at 13.5% and that it is mainly driven by increases in the price of food and non-alcoholic drinks.
Filipović recalled that the government had ensured wages for 800,000 workers in the private sector during the COVID-19 crisis as well as reasonable and affordable energy and fuel prices during the unprecedented energy crisis, while retail chains continued to increase prices from month to month.
"In the present situation, when we have adopted the euro, they are continuing to increase prices, trying to cheat Croatian citizens. They will not get away with it," the economy minister said, recalling that in September the government had limited the price of nine basic products to help the citizens in need.
"At that time retailers could be heard saying that they would go under, that there would be shortages, but none of that happened. What happened is that the price of as many as seven of the nine products is lower than the caps set by the government. Competition has kicked in and the price of the nine products was lowered by nearly 30 per cent, which clearly shows that there is room for price reductions," Filipović said.
He said he had asked the retailers which of them had cut prices now that fuel prices had gone down, and none of them answered that question.
"What I expect them to do in the time ahead is to start lowering prices and not to continue increasing them because there is no reason for that," the minister said, stressing that prices should stabilise.
Asked to specify which retail chains had raised their prices and by how much, Filipović said that state inspectors were on the ground and would report on it.
Asked if the meeting could have taken place earlier given that there had been indications that retailers might want to round off prices upwards, Filipović said that the government acted in good faith treating retailers as its partners.
"We sent messages today and I believe they will catch on. The government has mechanisms to protect citizens," Filipović stressed.
Asked to specify those mechanisms, Filipović said: "Everything is on the table, from black lists to a price freeze on a wide range of products." He added that he believed that a reasonable arrangement would be found eventually "because everyone should be aware that they need to share the burden of the crisis."
"The government cannot be expected to continue intervening in energy and fuel prices because of the unjustified rounding off of prices during the changeover to the euro, while at the same time some are looking at how to increase their profits at the expense of citizens," Filipović said.
Representatives of retailers did not speak to the press after the meeting, but they said before the meeting that price increases were not due to rounding off prices but because of other factors, including the COVID-19 crisis and the Ukraine war.
"Retailers did not increase their prices. They rounded them off according to the rules. If the last digit was five or higher, the price was rounded off upwards, and if it was four or less, it was rounded off downwards, just as the government proposed in its guidelines," the head of retailers at the Croatian Employers' Association, Martin Ivačić, said before the meeting.