Mandatory action: the Ministry of National Economy takes action against retail chains that apply unfair price increases

By: Trademagazin Date: 2024. 08. 28. 12:20

The government measures introduced to protect families, such as food price caps, mandatory special offers, and the online price monitoring system, have proven to be effective in breaking down sanctioned inflation. At the same time, following the introduction of the mandatory promotions, the commercial chains implemented simultaneous and significant price increases for basic products, against which the Ministry of National Economy (NGM) takes decisive measures and initiates a competition law investigation by the Economic Competition Office (GVH), the NGM announced in its statement on Wednesday.

In the announcement, it was recalled: the system of mandatory promotions was introduced by the government from June 1, 2023, on the proposal of the Ministry of National Economy. Mandatory promotions, combined with the online price monitoring system, contributed significantly to breaking down and suppressing inflation. In order to comply with the rules and thus protect families, the government offices acting as consumer protection authorities acted strictly: they inspected nearly 3,000 shops and imposed fines in the amount of about HUF 650 million.

The government continuously reviewed the inflationary processes and the related system of measures and determined in June 2024 that the mandatory promotion had achieved its goal, therefore it introduced the measure as of July 1, 2024. At the same time, in order to maintain competition between retail stores, it continues to operate the online price monitoring system – reminded the NGM.

However, based on the daily updated price data in the online price monitoring system, it became clear that following the introduction of the mandatory promotions, the largest retail chains implemented a simultaneous and significant price increase for the consumer prices of fine flour, 2.8 percent UHT milk and sugar, among others. The price of brand-name fine flour was increased by almost 80 percent on average by the largest retail chains, but in some stores there was also a price increase of more than 100 percent for certain flours.