Price increases for products with previous price caps: an investigation may be launched against the store chains

By: Trademagazin Date: 2024. 09. 20. 12:36

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The Ministry of National Economy (NGM) recently expressed its concerns about the fact that large chain stores simultaneously raised the prices of products that were previously subject to price caps and then to mandatory promotions. In particular, they mentioned manufacturer-branded milk, granulated sugar, and fine flour, the prices of which have risen significantly since the beginning of July. The ministry turned to the Economic Competition Authority (GVH) to investigate whether anti-competitive pricing had taken place.

As of July 1, 2024, the mandatory promotions for products with a price cap, according to which the products had to be sold at a maximum purchase price, ceased. After that, the prices of the previously price-capped products suddenly increased. The NGM is now wondering whether illegal market behavior is behind the price increases. – writes the G7.

Analysis of PÁIR and price increases

Based on the weekly reports of the Market Price Information System (PÁIR) of the Agrárgazdasági Research Institute, procurement and consumer prices can be easily monitored. Based on the reports, it can be seen that there were indeed significant consumer price increases for the products mentioned by NGM, but the increase in purchase prices also played a role in this. One of the best-studied products is milk, where changes are clearly visible for UHT milks of different fat content.

The NGM highlighted that the price of the manufacturer’s branded UHT milk with a fat content of 2.8 percent increased by 45 percent after July 1, which can also be verified based on the PÁIR data. Store chains sold this milk product at a 71 percent markup of the purchase price in July-August, while milk with a fat content of 1.5 percent was sold at an 89 percent markup in the same period.