Starting mid-March and continuing through the end of May, Hungary will implement restrictions on profit margins for 30 specific food items.
Prime Minister Viktor Orbán announced that retailers’ profit margins cannot exceed 10%. This measure aims to tackle rising food prices, which have concerned many consumers.
“We are putting an end to unjustified price increases,” Orbán stated on the government’s website today (11 March).
In order to combat excessive price hikes, the government engaged in discussions with representatives from various retail chains. Orbán expressed disappointment, stating, “Unfortunately, the offers of retailers fell far short of our expectations, so we had to decide to introduce measures for trade.”
The Prime Minister noted alarming price increases, citing that eggs have surged by 40%, while butter and sour cream have more than doubled, increasing by over 80% in recent months.
The Hungarian government plans to reassess these measures at the end of May, indicating that they may be extended if necessary. “We will review them then and, if necessary, continue them. We will put an end to excessive and unjustified price increases,” he added.
In February, consumer prices in Hungary saw a year-on-year increase of 5.6%, with food prices alone rising by 7.1%.
Economists at ING expressed concerns, stating that “Food price increases seen in the last two months are a repricing rate reminiscent of the period of the cost of living crisis. Both processed and unprocessed food inflation remained strong.”
Last year, the Hungarian government mandated large food retailers to label products indicating instances of “shrinkflation”.
Retailers with sales revenues exceeding Ft1bn ($2.9m) were required to display warnings on products that have diminished in size while maintaining or increasing prices. This information was to be provided for two months from the date they began selling the reduced-size product.