Hungary will restrict profit margins on 30 food items from mid-March until the end of May.
Retailers’ margins cannot exceed 10%, announced Prime Minister Viktor Orbán on the government’s website today (11 March).
“We are putting an end to unjustified price increases,” Orbán said.
“In order to curb unjustified and excessive price increases, we have been negotiating with representatives of retail chains in recent days. Unfortunately, the offers of retailers fell far short of our expectations, so we had to decide to introduce measures for trade.”
Orbán said prices of eggs had jumped by 40% and butter and sour cream by more than 80% in recent months.
The Hungarian government is going to review the measures at the end of May and will keep them in place if necessary.
“We will review them then and, if necessary, continue them. We will put an end to excessive and unjustified price increases,” Orbán said.
In February, consumer prices in Hungary rose 5.6% year on year, with food prices up 7.1%.
“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,” economists at Dutch bank ING said.
Last year, the Hungarian government ordered large food retailers to label items to indicate instances of “shrinkflation”.
Food retailers with a sales revenue larger than Ft1bn ($2.9m) were obliged to display warnings on products that have shrunk in size while their prices have been maintained or increased.
Retailers had to provide the information for two months from the date they started to sell the product in the reduced size.
