2023-04-26 13:58:47
Vienna. While the Austrian government continues its fight against the inflation monster, high increases in food prices scare the Austrians!
Social Affairs Minister Johannes Rauch (Greens) and Deputy Prime Minister Werner Kogler (Greens) announced that they would like to hold a meeting with food traders in the next few days to discuss rising food prices. The date of the meeting and the exact participant group will be determined in the coming days. The Ministry of Social Affairs announced on Monday that the debate will clarify the question of whether the price hikes are really justified or whether intervention should be made.
The Ministry of Social Affairs wonders why the rise in food prices is so much higher than the already high inflation rate. According to the ministry, the Federal Competition Authority (BWB) has already launched an investigation and has recently interviewed 1,500 food traders. It was determined that many European countries took different measures. In Austria, just over a tenth of household expenditure is used for food.
As Consumer Protection Minister, I expect answers from the food trade. @WKogler and I will clarify with the representatives of the big chains whether these price increases are really justified or whether there is a need to intervene. 2/2
— Johannes Rauch (@johannes_rauch) April 20, 2023
SPÖ companies point out, FPÖ demand VAT reduction
According to the SPÖ and ÖGB, it is companies’ “price cutting” that is responsible for inflation. FPÖ social spokesperson Dagmar Belakowitsch demanded “quick and visible relief” for citizens. Belakowitsch, „We have repeatedly demanded a reduction in VAT on basic foodstuffs, but the ÖVP and the Greens did not speak out“ said.
From the perspective of Economy Minister Martin Kocher (ÖVP), there is little opportunity to influence prices in the short run. On the other hand, emphasizing the importance of functioning competition, the Minister said that in the long run, competition has a lowering effect on prices and “leads to prices that are in the best interest of consumers”.
“Homemade” inflation
According to the Momentum Institute, profits from domestic companies trigger inflation in Austria more strongly than in almost any other Eurozone country.
“Homemade” inflation, that is, the portion of the price increases that is not due to imported inflation, amounted to 5.8 percent in the euro area. More than half of the “homemade” inflation of just under 60 percent was driven by increased corporate profits.
Austria: Inflation was 9.2 percent in March
Momentum writes that inflation in Austria in March was 9.2 percent, while the value of “homemade” inflation was last at 6.5 percent. The contribution of corporate profits to inflation was 75 percent, significantly higher than the European comparison.
But a ranking in which Austria is doing much better was also compiled by industry-focused Agenda Austria: According to this ranking, food prices in Austria rose less than in most other EU countries; for example, the 14.6 percent increase in food prices was significantly lower than in Germany, but also less so than in neighboring countries Hungary, Slovakia, the Czech Republic or Slovenia.
„Then only one thing helps: more competition“
Austrian Agenda and Jan Kluge, „If food prices rise much more in Austria than in comparable countries, then one has to ask if something is wrong,“ says. At present, however, trade appears to mainly reflect rising world market prices. The only remedy that Agenda Austria currently offers is “more competition“. Kluge this, “If there’s an occasional bit of money in it, there’s only one thing that helps: more competition.” explains in words. (yenivatan.at)
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