Government Reported to Extend Capped Food Prices

The food price freeze in Hungary could be maintained until next April, according to the financial website portfolio.hu. Several sources say that the price freeze, which currently runs until December, would not be lifted at the end of the year, but would be maintained at least until Easter.

According to sources to Portfolio, the issue was discussed at the last government meeting, and there is strong support in government circles for a food price freeze. The price freeze is currently in place until the end of December, but the government would "please" consumers by keeping it in place until Easter.

Sources say that the government will also be looking at bigger fines and stricter controls, as the cabinet is becoming increasingly unhappy with the increasingly drastic shortages of food products under the price freeze.

“It's hell in the shops, because people are already saving too much. But the cow will not give any more milk than it has been giving. Chickens won't have four breasts either,” a source said on the extension of the price freeze and the tougher controls. In other words, while demand is increasing, supply is not, as traders have no interest in selling more than expected (last year) (because of the losses suffered), the website says.

The question is what suppliers, i.e. importers, will do, because although they can now only sell their price-freeze products at a lower price in Hungary than in other countries, they have the opportunity to capture the market. There are already signs that imports are making greater inroads in certain products.

One of Portfolio’s sources says that this will make it less and less likely that retail chains will be able to offer Hungarian products, as some retailers can get products cheaper from imported sources. He added that the price freeze puts the entire supply chain at risk.

Portfolio also asked the government about the issue, but only received a general answer that the government is monitoring the situation and will make decisions based on this...