Lower food prices by 12.8 pc after cutting VAT, Romania’s competition watchdog shows

Following the government’s decision to reduce VAT on food as of June 1, during May 4 – July 5 Competition Council (CC) has conducted checks on 18 basic products. Nine retailers have participated in the analysis: Auchan, Billa, Carrefour, Cora, Kaufland, Lidl, Mega Image, Penny, Profi. Regarding the traditional trade, the data were collected from over 600 stores across the country.

“(…) The prices have dropped in both traditional and modern trade at: 9.1 percent and 12.8 percent respectively. It is noted that the prices decline in modern trade was more pronounced than the traditional trade, reduction of VAT being almost fully passed to consumers.” Bogdan Chiritoiu, the president of the Romanian competition regulator, said for Agerpres.

He argues that a lower price reduction of traditional trade could be attributed to the fact that in this sector, competition is not very intense, and another cause could be the high evasion.

Also, Chiritoiu said that the institution will continue to monitor the prices in shops in the coming months, the main purpose of the analysis being to see if a cartel might arise between retailers.

analysisbasic productsBogdan ChiritoiucartelCompetition Council (CC)Cutting VATfood priceshigh evasionmodern traderetailersRomanian competition regulatortraditional trade
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