Since September, when the government’s regulation on limiting retail margins came into force, not only have prices failed to decrease, but some have actually risen significantly. As the weekly Vreme reports, official data from the Republic Statistical Office also show that the results of the measure are far from satisfactory. During the same period in which the regulation was adopted, electricity, gas and fuel prices increased, and these costs will further spill over into retail prices toward the end of autumn. Economist Dragovan Milićević stated that the prices of essential goods—flour, sugar, oil and meat—have either remained unchanged or increased slightly.
The only exceptions are private-label products sold by large retail chains, which have always been cheaper, as they carry lower production and marketing costs compared with branded goods.
The effects of margin caps were also undermined by the government itself, just two weeks after the measure was introduced, as different categories of food items were gradually exempted. Although the regulation was supposed to last six months, fresh meat and fish, fruits and vegetables, coffee and cocoa, and later eggs were all removed from the price-limit list. As Vreme notes, this means that key food items were not price-controlled even 60 days, let alone the promised 180.
President Aleksandar Vučić had presented the margin-capping measure in August as a “miraculous solution,” claiming it would improve the lives of millions of citizens. However, since the measure was introduced with strong rhetoric toward retailers, the government later softened its own regulation, retail prices did not meaningfully fall, Brussels expressed criticism, and several supermarket chains began closing stores, the article concludes.
