Factsheet for measure
HR-2022-37/2827
–
Updated
– measures in Croatia
Limitation of the prices of basic food items
Ograničenje cijena osnovnih živežnih namjernica
Background information
Prices of everyday households items increased due to the inflation and supply chain issues resulting from the war in Ukraine. In response to increased prices, the Croatian government created a measure to mitigate price growth by limiting the prices of basic foodstuffs. The government's intention is to preserve the basic living standard of the population without endangering the market.
Content of measure
Each product decreased in price by a unique amount. The price for edible sunflower oil decreased by 20% and the price of milk decreased by 26%. The price of smooth flour decreased by 33% and the price of hard flour decreased by 30%. The price of white crystal sugar decreased by 20%. The price of chicken decreased by 28% and the price of pork decreased by 34%. The government stipulated that the gross trader's margin calculated on the net invoice price minus all rebates and discounts should amount to a maximum of 1% for sugar and pork, and 5% for the other food items.
Updates
The following updates to this measure have been made after it came into effect.
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19 September 2023
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The Croatian Government on 14 September 2023 announced its decision on price caps for a six-month period on thirty various commonly purchased products. The goal of this measure is to lower expenditures for families struggling to make ends meet. These products are as follows: edible sunflower, milk with 2.8% milk fat, white crystal sugar, smooth T-550 flour and sharp T-400 flour, minced pork packaged meat, whole chicken, yogurt, semi-hard cheese, long grain rice, spaghetti, fresh egg, boneless pork neck, chicken/turkey hot dogs, bacon hamburger, carrots in bulk, beans in bulk, pureed tomato; lemon, apples, milk chocolate bar, syrup with sugar, toothpaste, shower gel, shampoo, toilet paper, standard sanitary napkins, standard diapers, potatoes and beef neck with bones. The new package of measures for the next six months is worth €464 million. That is in addition to the existing €551 million cost, which is the total value of the measures from the previous package, currently in force for one year. A complete basket of products for which prices have now been frozen would have cost €99.68 at the end of 2022. Now, at these newly frozen prices it costs €76.19, or 23.57 percent less. The Decision entered into force on 18 September 2023. In order to be more recognisable, products with frozen prices will be visibly marked with a unique logo. Some retail chains informed the public even before that they were immediately starting their discounts on products that are not related to government measures.
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14 March 2023
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Due to its complexity and long-term consequences of the situation with prices increase, the government on 14 March 2023, announced that from 1 April 2023, it would keep all limitation of the prices of basic food items except some types of pork meat due to the possible shortages of this meat on the market. According to the new decision, only the highest price of sunflower oil changes, and it decreased to €1.72 (previously it was €1.86) for one litre. While the citizens support such measures, there is chaos on the market, because agricultural producers deem that they are hostages of the government measures.
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Use of measure
The government said that this measure will enable citizens to increase their consumer basket. it is estimated that a complete basket of products, which has been limited in price at the end of 2022, would cost (without this measure) €99.68, while at the limited prices it costs €76.19: 23.6% less, with a saving of €23.49. The items whose prices have been limited by the government will have a label stating that it is a product with a limited price. The government believes that this will make shopping easier for consumers.
Target groups
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Workers
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Businesses
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Citizens
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Does not apply to workers
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Does not apply to businesses
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Applies to all citizens
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Actors and funding
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Actors
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Funding
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National government
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No special funding required
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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No involvement as case not in social partner domain
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Consulted
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Form
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Not applicable
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Direct consultation outside a formal body
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Social partners' role in the
implementation, monitoring and assessment phase:
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Only employers' organisations
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Main level of involvement: Peak or cross-sectoral level
Involvement
As mentioned, the government, after consultation with both representatives of manufacturers and representatives of retail chains, decided to limit the prices of selected food items. The Croatian Employers' Association is fully aware of the complexity of the situation and vulnerability of households to high increase of food prices, but its representatives are afraid that employers will bear all the costs of the mentioned measure.
Views and reactions
While trade unions generally support such limitation, employers' organizations are mostly against the regulation of the prices on the free market.
For istance, trade unions in Croatia fully support the new package of measures to help citizens, including the limitation of food items price.
In contrast, representatives of the Croatian employers' associations are afraid that employers will bear the full costs of such measure. Furthermore, according to the applicable Act on the Prohibition of Unfair Trade Practices, selling below the purchase price is highly punishable in Croatia, with a fine of up to HRK 5 million (€664,010) per individual case.
The agricultural sector has been warning about the danger of such measure for months. The agricultural producers state that they have been hit hard due to the impossibility of raising prices.
Sectors and occupations
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This case is sector-specific
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Economic area
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Sector (NACE level 2)
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A - Agriculture, Forestry And Fishing
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A1 Crop and animal production, hunting and related service activities
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G - Wholesale And Retail Trade; Repair Of Motor Vehicles And Motorcycles
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G46 Wholesale trade, except of motor vehicles and motorcycles
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G47 Retail trade, except of motor vehicles and motorcycles
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This case is not occupation-specific.
Sources
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08 September 2022: Ograničenje cijena osnovnih živežnih namjernica s obrazloženjima (Limitation of the prices of basic food items with explanation)
(vlada.gov.hr)
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08 September 2022: Sindikat podržava mjere (Trade unions supports the measures)
(www.vecernji.hr)
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08 September 2022: Mišljenje trgovaca o mjeri (The opinion by retail sector on measure)
(www.index.hr)
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09 September 2022: Objava odluke o ograničenju cijena određenih prehrambenih proizvoda (Proclamation of the decision on the price limitation of certain food products)
(narodne-novine.nn.hr)
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14 March 2023: Ogranicenje cijene hrane (Limitation of food prices)
(www.agroklub.com)
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17 March 2023: Odluka vlade (Decision of the government)
(narodne-novine.nn.hr)
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15 September 2023: Price caps for 30 products (Ogranicenje cijena za 30 proizvoda)
(narodne-novine.nn.hr)
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18 September 2023: Explanation on price caps (Objasnjenje za ogranicenje cijena)
(www.poslovni.hr)
