Slovaks will not benefit much from the capped food prices. In stores, they often buy food on sale or at a discount for a much better price than the fixed price. It turns out that firm price fixing in sectors where there is plenty of competition in the market is a signal that the winner is not the average consumer.
And if food prices are to really fall, the state must help producers more with cost reduction, not ceiling prices only at the final sale to customers.
Eight Slovak chains put a ceiling on food prices with the marketing help of the Minister of Agriculture Samuel Vlčan. The largest chains such as Lidl, Kaufland, Tesco and Billa have compiled lists of dozens of foods for which they guarantee discounted and capped prices for three months. The first month is slowly coming to an end and consumers are still deep in their pockets.
Loud criticism from various ranks
Critical voices are heard not only from the ranks of ordinary consumers, but also from the ranks of food producers, the professional public and other politicians, even from coalition partners. “It’s a bad joke. This is a marketing move by the minister, the government has nothing to do with it. I’m sorry that he got too old to do it, the business is under the management of the Ministry of Economy,” said Boris Kollár, chairman of the We Are Family party, in the program Na telo on TV Markíza.
“Minister S. Vlčan should take care of primary production so that they receive better support from the state, to enforce concessions or cheaper energy prices for them. That was a move like Black Friday, goods are sold more expensive than before. The Antimonopoly Office should definitely intervene,” he added. According to him, the capped price of food is higher than the standard price, without discounts or promotions.
The chairman of the opposition Freedom and Solidarity (SaS) movement, Richard Sulík, admitted that behind the chain’s initiative, there is a cartel agreement and everything needs to be checked. Capping food prices is said to be just misleading people and another populist move.
“The chains have capped the prices of those foods for three months, which are likely to gradually decrease. On the other hand, for example, the price of pork, which will probably rise in the coming months, is not capped. In addition, there are completely illogical and ridiculous items on the list, such as beer, wine or frozen pizza,” says Jarmila Halgašová, who works in agriculture at SaS.
The fact that the capped food prices are not that advantageous was also confirmed by the Czech portal idnes. He focused on some items that are sold in the Czech Republic and found that those in discount campaigns beat not only the Slovak fixed prices, but also the discounted ones.
According to the product manager of the AkcniCeny.cz website, Gjurses Siderov, Slovak merchants know how to offer covered food products cheaper in discount campaigns. “However, even in the discount promotions in Slovakia, they do not come close to the Czech promotional prices,” pointed out G. Siderov.
Is it a cartel or not? You have to wait
At the moment, it is premature to assess whether capping food prices restricts economic competition, spokeswoman for the Antimonopoly Office (PMÚ SR) Adriana Oľšavská said.
In general, according to it, any agreement between competitors regarding the setting of prices or the exchange of information on the pricing of products or services can lead to a restriction of the competitive environment. It may thus constitute a violation of the relevant provisions of the Act on the Protection of Economic Competition. The consequences of such a violation can manifest themselves not only in the market for the sale of selected products, but also in the market for their purchase.
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