The price of the chips clearly shows the problematic nature of the pricing policy shaping retail trade

By: Trademagazin Date: 2024. 01. 26. 11:53

The drastic difference in prices of Pringles chips between Hungary and Spain reflects the complexity of the taxation system and VAT rates. The price differences between the two countries have not only an economic but also a tax background, which have a significant impact on retail prices and the wallets of end users.

Based on the price policy of the Spanish Mercadona, Pringles chips currently cost 1.85 euros, which corresponds to 717 forints at the current euro exchange rate. On the other hand, the typical store price in Hungary is HUF 1,400 (€3.6), which is about twice the Spanish price. This price difference is obvious to Hungarian consumers, and the background is the tax system and VAT rates – all of this is pointed out by the Vakmajom Facebook page.

According to the post, Hungarian chip prices hovered around HUF 800 before 2022, and then rose by leaps and bounds. The reason for this was the introduction of the chip tax and the special retail tax, which brought with them a significant increase in tax burdens. For retailers, the increase in tax burdens was a serious challenge, as their profit margin typically ranges between 2-4 percent. The 4.5 percent special retail tax therefore took away the entire commercial profit from merchants.