Viktor Orbán on Kossuth Radio: traders cannot add more than 10 percent to the purchase price

Viktor Orbán justified the introduction of the margin regulation, which came into effect on Monday, by saying that there were several economic events that should have caused prices to fall, as the Ukrainian-Russian war – thanks to the efforts of US President Donald Trump – is moving towards peace, signs of this have appeared in the economy.

He mentioned among these the forint-euro exchange rate and the decline in the world market prices of gas and oil.

The prime minister said that traders had proposed a price reduction, but it was so minimal that it “fell far short of the government’s expectations and what people could have felt”, and therefore there was no other choice but for the government to intervene.

He added that Hungary is not the only country in this situation; four other countries in Europe have also chosen the solution that the Hungarians have chosen. There is also a more drastic form of intervention in reserve, if margin regulation does not lead to sufficient results, which is also being applied by one or two countries on the continent, he said.

Viktor Orbán said that if the price stop is applied, the trader has the opportunity to pass on the effect of the price reduction to the processor or the purchaser, thus reducing the price paid to the Hungarian farmer. When the margin is regulated, the government says, “it doesn’t matter how much you bought the goods for, dear trader,” what you can add to the purchase price cannot be more than 10 percent, this includes both costs and profits. This way, the effect of the price reduction cannot be passed on to the producers, so Hungarian farmers are not worse off, he added.

He summed up that if a price cap were to be introduced, it could be pushed further downward by traders, but it would be more guaranteed to hold prices down; “we are still only in the middle phase.”