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Price Speculation Fueled Food Price Inflation, GVH Head Claims

Retail

Photo by Denys Kurbatov / Shutterstock.com

Price speculation was a contributing factor to high food price inflation in Hungary, the head of the Competition Office (GVH) said in an interview with conservative daily Magyar Nemzet published on Monday, state news wire MTI reports.

Csaba Balázs Rigó said probes of the dairy products and non-perishables markets had indicated that some big supermarket chains operating in Hungary had "pessimistically calculated with a EUR/HUF exchange rate over 400 and persistently high energy prices and adjusted their prices accordingly".

"Hungarian consumers paid that price," he claimed.

He said the watchdog had found some products for which gross margins had "tripled, sometimes quintupled", while some companies had priced in factors ahead of time that had not materialized. "This was certainly done to ensure profits expected by foreign owners; we're talking about inflation driven by profits," he added.

These developments "could be called profiteering, but are more accurately described by the term price speculation", he said. "While the rise in food prices was gigantic, the situation of Hungarian producers didn't improve, and some even had to face lower factory gate prices," he added.

Rigó suggested that food price inflation may still have been high in Hungary even without the behavior of those supermarket chains, but the scale of the increase wouldn't have made the country such an outlier. 

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