Filenews 26 May 2024 - by Theano Thio
The question consumers often ask is "why do food prices continue to remain high while inflation falls?"
And "where will prices reach when in about a month (June 30, 2024) the measure for a zero VAT rate on basic food categories (bread, milk, eggs, baby food, baby diapers, coffee, sugar, fresh or chilled or frozen meats, fresh or chilled vegetables) and the subsidy on electricity will end?"
It is a measure that was implemented in 2023 and gradually began to expand over time and include larger groups of products as inflation rose, resulting in not so much a substantial reduction in prices, as the data show, but at least a containment of increases.
The political debate over whether the measures will be extended has not yet heated up, and for now political pressure on the government is lukewarm. Nor does the government open the issue, judging that it is too early to announce its intentions.
On the positive side, inflation in the food sector shows signs of moderation, staying at an increase of 1.89% in the period January-April 2024, compared to the same period last year and compared to 2.14% in the period January-March 2024, according to the Consumer Product Price Observatory for April 2024, announced by the Consumer Protection Service.
In food and other basic supermarket items, the picture that emerges from the examination of the analytical data of the Statistical Service and the Consumer Protection Service of the Ministry of Commerce is that the decreases are very small, while on the contrary the increases are greater in specific food products. Essentially, households de facto "spend more but buy less", although they typically benefit from a zero VAT rate on basic necessities.
The ups and downs
According to the price observatory of basic consumer products of the Consumer Protection Service of the Ministry of Commerce, the price indices for the month of April, in a total of 45 categories of basic products, showed that 21 categories recorded an increase and 18 categories a decrease, while another 6 categories recorded no change.
Specifically, increases of 7.5% and 6.2% respectively were recorded for frozen molluscs/shellfish and frozen fish, after a three-month period of continuous decreases, by 4.7% for sugar after six months of continuous decreases, by 3.4% for broths, 3.3% for bottled water, 3% for oil due to new moderate increases in the price of olive oil, compared to the previous month, 2.8% for juices, breakfast cereals and diapers, 2.7% baby food, 2.2% frozen pasta and 2% canned meat.
A decrease was recorded in 18 categories, with the most important being fresh vegetables and greens by 13.1%, by 10.8% vegetable cooking fat, 5.4% flour, 4.6% fresh fish and molluscs, 4% eggs, 2.3% pasta, 1.5% bagels, 1.2% rice and biscuits and 1.3% baby milk and fabric softeners.
Prices on the shelf
"F" records in practice what these price fluctuations mean for households, comparing products on supermarket shelves.
On the positive side, there are products whose prices remained at the same level as last year and where there were decreases, these were only a few cents. It should be clarified that no comparison can be made with previous years, as the law on monitoring retail product prices was implemented in 2023, so there is no data from the Consumer Protection Service.
As for the products available on supermarket shelves, in April, a 300 g package of lountza. (specific label) had an average price of €4.54, while last month the same product cost €4.55 and last year €4.56. A package of 300 gr. It had an average selling price of €3.87 this year, last month €3.93 and last year an average selling price of €3.97.
In dairy products, 400 gr. feta cheese (specific label) in April had a selling price of €7.09, compared to €7.06 in the previous month and €6.78 last year. The selling price of one kilogram of halloumi (specific label) had an average selling price of €13.44 in April compared to €13.32 in the previous month and €13.46 last year in April. One-litre milk of a specific label had an average selling price of €1.69 in April compared to €1.68 in March and €1.78 last year.
The product whose price has doubled in a year and has skyrocketed is olive oil. The average selling price in April was €15.09 from €14.82 in March and €7.03 last year. A two-liter package of olive oil had an average selling price in April of €30.05 from €28.41 in March and €14.62 last year.
In the meat category, a kilo of lamb, small pieces, had an average selling price of €10.40 in April from €10.94 in March and €9.66 last year.
For vegetables, the average selling price for a kilogram of greenhouse cucumbers was €1.27 from €1.54 last month and €1.54 last year. The average selling price of tomatoes in April was €1.45 from €1.62 in March and €2.01 last year and a kilo of potatoes had an average selling price in April of €2.03 from €1.05 last year.
Mitsotakis' intervention on the "hat" by multinationals
Greek Prime Minister Kyriakos Mitsotakis decided on May, 20 days before the European elections, to ask European Commission President Ursula von der Leyen to pull the ear of multinational cartels for the fact that they are strangling Greek households.
It called for concrete interventions in EU law to ensure equal treatment and consumer protection from the price cap put by multinational companies, mainly in countries with oligopolistic characteristics and with which they "deduct" at least €14 billion. euros every year from the cash reserves of European households.
He called for "even bolder steps to make the single market work with more competition and transparency in favour of consumers", warning that price differences were hurting European citizens' confidence in the single market. He noted that one of the most important issues that concern the Greek market, but also the markets of other member states, such as the Netherlands, Belgium, Croatia, the Czech Republic, Denmark, Luxembourg and Slovakia, is the unjustifiably high prices at which branded basic consumer products of multinational companies are sold, compared to other countries of the European Union.
Vagueness by the Commission to be precise
The European Commission, on May 21, gave a response to Kyriakos Mitsotakis' letter, full of general wordings that do not clarify how he intends to "solve" the problem of accuracy.
"The Commission will not hesitate to protect consumers by investigating these cases as a matter of priority. While enforcing competition as such cannot tackle the problem at the root, it can play an important role. Many Member States have asked the Commission to examine this issue and identify a solution for the Single Market beyond competition rules. The cost-of-living crisis is making prices even more sensitive for consumers."
