GFM: from June, the mandatory promotions will start in order to break food price inflation

By: Trademagazin Date: 2023. 05. 05. 11:58

The war and the failed sanctions policy led to unprecedented inflation across Europe. The government’s goal is to protect families, pensioners, jobs, and full employment even in an economic situation affected by sanctions, as well as prevent recession and reduce inflation to single digits by the end of the year. Based on international examples, the government decided on the introduction of mandatory promotions – the Ministry of Economic Development (GFM) announced to MTI on Friday.

According to the announcement, the GFM and the Ministry of Agriculture conducted the necessary social consultations, held constructive professional discussions with the largest commercial chains and associations, and took the received proposals into account when developing the detailed rules.

Pursuant to all of this, the government orders the mandatory promotion as follows: traders must introduce the mandatory promotion between June 1, 2023 and September 30, 2023.

The promotional period is the period from 0:00 on the Thursday of the week until 24:00 on the Wednesday of the following week, or a period of 168 consecutive hours freely chosen by the trader.

A trader is considered to be the one who carries on the activity indicated in the Unified Sectoral Classification System of Activities under the designation “4711 – Miscellaneous retail trade of a food nature” as the main activity and whose net sales in 2021 exceeded HUF 1 billion. In addition to commercial activities carried out in shops or shopping centers, the decree also covers mail-order trade.

According to the announcement, 20 product categories subject to promotions have been defined, including the following: poultry meat; pork, beef, other types of meat; milk, cream and substitutes; cheese; bread; pastries; dry pasta, rice, other cereals; fresh fruit; fresh vegetables; ready meals, spices, seasonings.

During the promotion period, the trader is obliged to apply a price that is at least ten percent lower than the lowest gross retail price applied by him in the last 30 days for at least one product per product category.

When determining the lowest gross retail price, the reduced gross retail price of the product, which was applied due to the expiration of the product’s quality preservation or shelf life, in the previous 72 hours, does not have to be taken into account.
No other costs or fees may be charged during the application of the price reduction.

The trader is obliged to post the information related to the price reduction in a clearly visible place in the store, as well as to display it on his online interface in connection with his advertising activities.

During the promotional period, the trader is obliged to sell an appropriate quantity of the product affected by the compulsory promotion in order to ensure continuous customer service.

The control of the consumer protection authority will be continuous, depending on the specific case, violation of the regulations may result in a fine of between HUF 500,000 and HUF 3,000,000.

The detailed rules for the mandatory action will soon be published in the Magyar Közlöny. Breaking down inflation and reducing it to single digits is a common goal in which all actors feel their own responsibility. The government expects from the decision that overpricing can be stopped by reducing prices and increasing the competitive situation, so that the mandatory promotions can already contribute to breaking down inflation in the near future.

Thanks to the measure, every week customers will have a discounted grocery basket of 20 products available at the given store, which they can buy cheaper than before – read the announcement of the Ministry of Economic Development.