The Austrians have been busy for months with the high price increases for food. But who is to blame for this? And how to stop the constant rises? The political parties have different solutions. Minister of Social Affairs Johannes Rauch (Greens) wants to invite grocers for talks in the coming days.
The date and the exact group of participants for the meeting that Rauch and Vice Chancellor Werner Kogler (Greens) want to convene should be determined in the coming days. The conversation should clarify whether the price increases are really justified or whether action is needed, the Ministry of Social Affairs said on Monday.
Different measures in Europe
The Ministry of Social Affairs questions why food price increases are significantly higher than inflation, which is already high. According to the ministry, the Federal Competition Authority (BWB) has already launched an investigation and recently questioned 1,500 food retail suppliers. Many European countries have taken various measures. In Austria, just over one-tenth of household spending goes on food.
SPÖ appoints companies, FPÖ demands VAT reduction
For SPÖ and ÖGB it is clear that “price erosion” by companies is to blame for inflation. FPÖ social spokeswoman Dagmar Belakowitsch called for a “quick and noticeable relief” for citizens. “We have called several times for a reduction in VAT on basic foodstuffs, but without hearing from the ÖVP and the Greens,” said Belakowitsch.
Kocher: Possibilities for short-term influence are slim
From the point of view of Minister of Economic Affairs Martin Kocher (ÖVP), the possibilities to influence prices in the short term are small. He emphasized the importance of a well-functioning league. This has a dampening effect in the long term and “best leads to prices that are in the consumer’s interest”, according to the minister.
According to the Momentum Institute, the profits of domestic companies drive inflation more in Austria than in almost all other countries in the Eurozone.
‘Homemade’ inflation, ie that part of the price increases that is not due to imported inflation, amounted to 5.8 percent in the euro area. At almost 60 percent, more than half of the ‘homemade’ inflation was caused by higher corporate profits.
Austria: Inflation in March was 9.2 percent
In Austria, inflation in March was 9.2 percent, the value of ‘homemade’ inflation was 6.5 percent, Momentum writes. At 75 percent, the contribution of corporate profits to inflation is considerably higher than in a comparison at the European level.
EU: Food prices in Austria have risen less sharply
The industry-related Agenda Austria has also compiled a ranking in which Austria fares much better: according to this, food prices in Austria rose less sharply during the year than in most other EU countries – the 14.6 percent increase in food prices was accordingly considerably less than in Germany, for example, but also less than in the neighboring countries Hungary, Slovakia, the Czech Republic or Slovenia.
‘Then only one thing helps: more competition’
“If food prices in Austria were to rise much more than in comparable countries, you would have to wonder if something is wrong,” says Jan Kluge of Agenda Austria. At the moment, however, trade seems to be mainly passing on the increased world market prices. “If there is a pittance now and then, only one thing can help: more competition,” is the well-known panacea of Agenda Austria.
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