How Orban’s New Food Price Cap Targets Foreign Retailers in Hungary: What You Need to Know

Hungarian Prime Minister Viktor Orban is taking big steps to address rising prices by introducing price controls on essential food items in supermarkets. This move is aimed at easing public frustration over inflation. However, some people in rural areas, where large retailers are hard to reach, may not feel the effects.

Many seniors, like 68-year-old Erzsebet Risztics from Tiszaroff, a village in one of Hungary’s poorer regions, are struggling. “We don’t go to big stores. They don’t help people like us,” she said. With limited access to transport, she finds it difficult to buy the low-sugar foods she needs for her diabetes, especially as prices continue to climb.

Inflation in Hungary hit 5.7% in February, the highest within the European Union. This number is significantly higher than the EU average of 2.7%. In response, Orban capped supermarket markups on 30 essential food items, keeping prices just 10% above wholesale costs. This aims to target larger retailers while exempting smaller local shops.

Orban claims that foreign retailers are unfairly raising prices. He accused them of “plundering” Hungarians with steep profit margins. Big chains like SPAR and Lidl dominate the market, sidelining local businesses. Over the years, the government has tried to protect Hungarian interests, even implementing taxes on superprofits from these multinationals.

However, those in the retail industry argue that the government’s accusations don’t hold up. The Hungarian Trade Association states that profits are declining, with some retailers facing losses. For example, SPAR predicts losing about €3.7 million monthly due to these price controls. Gabriella Heiszler, head of SPAR in Hungary, warned that further complications could lead to job cuts.

Economists have mixed feelings about the effectiveness of these measures. While David Nemeth from K&H Bank believes they might provide temporary relief, he warns that prices could spike again once controls are lifted. Previous attempts to manage prices led to higher inflation down the line.

The impact of such interventions is not just economic. It affects people’s daily lives. Rozalia Patak, a mother of five, shares her struggles with rising food costs, often taking long bus rides to find better deals. “Every little bit helps,” she said, as she collects plastic bottles for extra cash.

In summary, while Orban’s price controls could offer short-term relief, the long-term effects might complicate the situation further. By focusing on multinational companies, the government aims to protect local customers, but it may also risk pushing prices higher in the end, leaving many still in need of assistance.

Check out this related article: Essential Guide to Natrona County Health and Food Inspections: What You Need to Know (March 24-30, 2025)

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