Recently, the Hungarian government decided that, starting from the 1st of February to the 1st of May, there will be a price limit for the following products:
granulated sugar;
wheat flour;
sunflower oil;
pork leg;
chicken breast;
chicken tail;
2.8% cow’s milk.
This initiative has been taken in order to fight inflation in the following months. It consists of not allowing distributors to charge higher prices than those set prior to the 15th of October for said products. It also states that the products must be kept in stock.
But what could this mean? It could mean that stores might make other products more expensive so that it compensates for the lost profit. This price limit could also lead to a problem regarding product distribution, as people might want to buy a greater quantity of goods, fearing that soon the prices will go up again. Some people might also tend to buy the “cheaper” products; and it is well-known that most cheap products have a cheaper quality, therefore creating a poorer lifestyle for some individuals.
However, without being able to raise the prices of some of the most essential products, people would have been tempted to buy more, since they are the most inexpensive. Anticipating this event, Lidl was the first market that introduced a quantity limit as well.
Lidl’s example was followed by other large companies in Hungary, such as Spar and Tesco. From now on, people will only be able to buy the maximum amount shown on a banner above, per receipt. In fact, Tesco aims to introduce the quantity limit per person, instead of per receipt.
Will this initiative help Hungary’s economic situation? Or will it create other issues in the near future?
By Kovács Teodora Maria
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