Lower prices for basic food stuffs
Authorities in Romania intend to expand the period for capped trade markup until the end of January 2024
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Leyla Cheamil, 23.10.2023, 14:00
Romania is one of the European countries which has this
year put a cap on some basic food stuffs. An emergency ordinance came into
effect on August 1st to enforce a temporary measure of fighting
price hikes in some farm and food products. The ordinance, which is valid for
three months, is focusing on capping prices in several food products such as
bread, milk, meat, vegetables, fruit with a view to boosting the population’s
purchasing power.
The discount, which had been previously discussed with
processors, distributors and traders, was initially envisaged for 14 products.
According to data released by the Ministry of Agriculture and Rural
Development, a survey on prices in supermarkets shows that significant price
cuts are registered in several products such as, bread, edible oil, potatoes,
cheese, maize, flour and sugar
Agriculture minister Florin Barbu has recently said the ordinance on capping the
trade markup will be extended. Barbu added that funding is presently available
for projects both in the field of processing and the producers’ energy
independence.
Food and farm products
in Romania have a VAT of 9%. Producers aren’t going to lose because the VAT on
production expenses is higher, as there is going to be compensation the
minister went on to say.
The Ministry’s project
points out to the government’s summer decision, which had a positive impact,
explaining why an expansion is needed in the upcoming cold season, with higher household
expenses and consumption during the winter holidays.
According to Prime
Minister Ciolacu, the cap on food prices contributed to bringing inflation
under 9% last month. The new ordinance should be endorsed by the end of this
month when the former provisions are going to expire.
Seven food categories
should be added on the list of those with a provisionally capped trade markup.
With the expanded period
of three months by the end of January 2024, of the 14 capped prices, other food
products will be added such as pound cake, tomato sauce, some types of light
sour cream, margarine and yeast. According to the authorities, the decision to
add more subsidized products to the list has been made jointly with processors
and retailers. Failure to comply with the provisions of the aforementioned
ordinance is considered offence and punishable with fines between 100 thousand
to 2 million RON.
(bill)
