Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure MT-2024-5/3463 – measures in Malta
Country | Malta , applies nationwide |
Time period | Open ended, started on 01 February 2024 |
Context | Cost of Living Crisis |
Type | Company practices |
Category |
Promoting the economic, labour market and social recovery into a green future
– Support for other basic items (e.g., food, housing, public transport, medicines) |
Author | Luke Anthony Fiorini (University of Malta) and Eurofound |
Measure added | 08 February 2024 (updated 28 March 2024) |
Despite Government measures to subsidise the cost of fuels, electricity, grains and animal feeds, the price of foods in Malta continued to rise throughout 2023. Factors such as Malta's limited domestic production of food and rising prices of imported foods and logistics contributed to this. In view of this, following discussions with individual larger retailers and importers, the Government announced that the prices of 400 food items were to be reduced by 15% from 1 February 2024.
The Government noted how it supported organisations via various measures during COVID-19 and the Ukraine war and because of this, it commenced discussions with individual large retailers in November 2023, arguing that these could give something back to society. It also argued that a stronger economy would ultimately benefit them. The Government explained how 15 categories of food products, with 400 products, were identified as those most impacted by inflation and consumed by the Maltese population. Consequently, it was announced that an agreement had been reached with importers and retailers to lower the recommended retail price (RRP) by at least 15%.
Furthermore, the Government also announced a measure to support smaller organisations that do not benefit from economies of scale. Stores with a turnover of less than €800,000 a year will be provided with €125 a month to compensate for the reduction in profits.
In order for consumers to identify participating stores, these are listed on a Government website (https://ekonomija.gov.mt/) and are provided with a sticker for their entrance.
In mid-January 2024, it was announced that at least 200 stores had agreed to form part of this scheme, and that the number was expected to continue growing.
Workers | Businesses | Citizens |
---|---|---|
Does not apply to workers |
Sector specific set of companies
Importing/Exporting companies |
Applies to all citizens |
Actors | Funding |
---|---|
National government
Company / Companies |
No special funding required
|
Social partners' role in designing the measure and form of involvement:
Trade unions | Employers' organisations | |
---|---|---|
Role | No involvement | No involvement |
Form | Not applicable | Not applicable |
Social partners' role in the implementation, monitoring and assessment phase:
Food importers had been under public pressure after Maltese Labour MEP Alex Agius Saliba asked the European Commission to investigate Maltese food importers for anti-trust violations. Food importers rejected this and stated that food prices were higher in Malta than in many European countries due to logistical difficulties encountered during importation. The Times of Malta (4 January 2024) reported that "the Economy Ministry has contacted operators directly to secure agreements, pressuring others to join the scheme rather than risk any damage to their reputation." Sources of the newspaper expressed their dismay at the Government's approach.
The Malta Chamber of Commerce criticised the Government's actions and stated that it amounted to price fixing, whilst also reducing consumers' choice.
The Malta Employers Association (MEA) also did not show support for the measure, and argued that making the Cost of Living Allowance (COLA) tax-free would have had a much greater impact upon individuals' purchasing power.
The Chamber of SMEs stated that it was unfair that this sector was asked to singlehandedly take the burden for inflation and warned against artificial interventions in a free market economy.
An exercise by the Times of Malta (2024, January 21) showed that consumers are likely to save very little through the measure, as many outlets already priced their items below the RRP: in some cases, substantially so. This however was sometimes not the case in smaller outlets.
The Anti-Poverty Forum, a coalition of 17 NGOs dedicated to social welfare in Malta, however, applauded the Government's initiative, describing it as much needed, and calling for further action.
The Nationalist Party (PN), the opposition party, criticised the measure and stated that the Government should instead develop a holistic plan to tackle inflation.
This case is sector-specific (only private sector)
Economic area | Sector (NACE level 2) |
---|---|
G - Wholesale And Retail Trade; Repair Of Motor Vehicles And Motorcycles | G46 Wholesale trade, except of motor vehicles and motorcycles |
G47 Retail trade, except of motor vehicles and motorcycles |
This case is not occupation-specific.
Citation
Eurofound (2024), Prices of selected food items to be reduced by 15%, measure MT-2024-5/3463 (measures in Malta), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/MT-2024-5_3463.html
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30 January 2023
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