Prices soared more in the Czech Republic than in the EU

Like last year, food prices in the Czech Republic rose faster than the European average at the beginning of this year. According to data provided to Právo by Eurostat, the prices of food, alcohol, and tobacco products in the Czech Republic rose by 19.6 percent year-on-year in January, while the EU average was 15.5 percent and the eurozone 14.1 percent.

Among the neighboring countries, the Slovaks were the worst off, with food prices rising by more than 23% year-on-year, while the Germans, Austrians, and Poles were better off, according to the latest Eurostat data.

Poland temporarily introduced a zero VAT rate on food last year in response to the energy crisis. In the Czech Republic, the VAT on food is 15 percent, but ministers refused to cut it last year. It could fall by one to two percentage points for food thanks to a planned merger of lower VAT rates advocated by the head of the state treasury, Zbyněk Stanjura (ODS).

“The Czech Republic has one of the highest VAT rates on food in Europe, and the difference is even more marked compared to neighboring countries. In Austria, Germany, Poland, and Slovakia, the VAT rate on foodstuffs is between 5 and 10 percent. Poland, in particular, has even reduced the VAT on basic foodstuffs to zero,” Martin Diviš, a partner at PwC ČR, pointed out last autumn.

The House of Commons will hold an extraordinary session

Last year, food prices in Hungary were the highest year-on-year (49.6%). In the Czech Republic, food prices rose by 27.2 percent, according to Eurostat, making the country the sixth highest among EU countries.

On average, food prices in the EU rose by 18.2 percent last year, with Luxembourg (up 11 percent), Ireland, and Cyprus doing the best, rising by over 12 percent. As recently as December 2021, the Czech Republic was still at the EU average, with food prices rising by 4.3 percent year-on-year.

Last year, the Ministry of Agriculture explained the steeper rise in food prices in the Czech Republic by claiming that food in the Czech Republic was, until recently, one of the cheapest in Europe and that the increase in the price of inputs into production was making final food more expensive.

The House of Commons will hold an extraordinary debate on food prices next Wednesday at the initiative of ANO. This is a frequent topic of the parliamentary opposition.

Recently, a social media post by the Deputy Speaker of the House, Karel Havlíček (ANO), attracted attention, where he compared the price of echo according to the costs of raw materials under the current government and the fees under the government of Andrej Babiš (ANO) in 2021. However, Havlíček operated with February prices, which are significantly higher than the yearly average due to seasonal reasons.