Nekula wants to limit discount promotions

Jan Handrejch

The head of the Ministry of Agriculture, Zdeněk Nekula (KDU-ČSL), does not want to regulate the food market or punish anyone, but he is raising a warning finger. He said this after a meeting with representatives of farmers, food producers, and traders after the Antimonopoly Office (ÚOHS) began monitoring the prices of butter, pork, chicken, and bakery products last week. The significant price volatility is expected to be resolved by a law on prices that would, for example, limit discount promotions.

“We all want to change the situation around food prices. I don’t want to regulate the market, and I don’t want to penalize anyone. However, I am raising a cautionary finger on behalf of the agriculture ministry,” the minister said.

According to the minister, extreme discounting campaigns are destroying Czech farmers, who cannot sell their products at below-cost prices in the long term. “We want (the promotions) to continue, but only within a set range,” he outlined.

Nekula also said on Thursday that he and representatives of the Agrarian Chamber, the Food Chamber, and the Union of Trade and Tourism agreed that an amendment to the law on significant market power should be pushed through as quickly as possible, as it allows the entire supply chain to be monitored.

No blanket measures

At the same time, the minister said he was not planning to reduce VAT on food across the board. “If we abolished VAT on food, we would provoke another reaction,” he outlined. This could be followed by a demand for a lower fuel tax.

“At the same time, we would hit the (state) budget on the revenue side. Then there would be a shortage of funds for pensions or education,” he added.

Food prices in the Czech Republic have risen by tens of percent yearly. According to the Czech Statistical Office, people paid the most for wheat flour, which rose about 60 percent in mid-April.

Bread and white pastries were about a third more expensive than last year’s fourth month, while people paid about a quarter more for butter or potatoes year on year.