The government's goal is to make consumers aware of price increases that are more difficult to notice.
The government is introducing another tool to keep inflation under control, the government decree to this effect has already been published in the Magyar Közlöny. According to this, in the future retail chains will be obliged to draw customers' attention to the fact that a product is available in a smaller package than before.
Food stores must post warnings in the form and content specified by the government when the packaging of a particular product will be smaller, i.e. its weight or volume will decrease.
The government decree also retroactively stipulates the obligation to inform customers if the packaging has changed between January 2020 and July 2023.
It is only necessary to draw the attention of consumers to the change if the manufacturer expands its range with the product in a smaller package, i.e. the product with the usual weight and volume will remain.
The government decree aimed at informing consumers divides the responsibility: retailers must inform customers about the change in packaging, but stores must act on the basis of the documentation related to the product from the manufacturer or the first distributor in Hungary.
This means that manufacturers and distributors are obliged to inform shops about the reduction in packaging, and they must also hand over the same documentation to the National Food Chain Safety Office (Nébih).
Based on the submitted information, Nébih is expected to make publicly available the database of products whose packaging has been reduced by the manufacturer.
The purpose of the government decree is for customers to be informed immediately if the price of a food product increases in such a way that the price per piece does not change, but the unit price actually increases due to the reduction of packaging.
The purpose of the government decree is clearly to raise awareness - pointed out György Vámos in response to Mandiner's question. The general secretary of the National Trade Association (OKSZ) also drew attention to the fact that manufacturers do not commit irregularities by reducing the packaging of a product, such a change does not constitute an unfair practice.
Manufacturers validate the increase in cost in the transfer price. At the same time, the self-costs of most market participants will also increase in 2024 - pointed out György Vámos, who mentioned, among other things, the change in fuel prices, as well as the increase in the minimum wage and the guaranteed minimum wage.
In recent years, we have seen that due to the increase in costs, the unit price, which is more noticeable to consumers, can rise sharply, so manufacturers do not reduce the packaging of their products in order to achieve a larger price increase.
Due to the price sensitivity of consumers, manufacturers have no interest in price increases that are greater than necessary due to the increase in their costs - pointed out György Vámos, who does not expect that price increases implemented by reducing the quantity and weight of the product will take on significant dimensions in the next period.
The general secretary added that if a manufacturer reduces the packaging of the product, it is primarily for business policy reasons, and according to him, the goal is not to deceive consumers, and the practice is not illegal at all.
Inflation was successfully suppressed: in the last months of last year, it permanently fell below 10 percent, and the rate of price increase fell to the level of the countries in the region. The rapid decline in inflation is expected to continue in the first quarter of this year, the rate of price increase may be around 5-6 percent this year, and around 3 percent from 2025.
In practice, this means that the sharp price increase experienced in the last two years will not return, but at the same time, a decrease in the price level is not expected.
Inflation, which broke records, severely restrained demand.
Stimulating household consumption is now a particularly important task for economic policy, and it is indispensable for domestic GDP to grow by 4 percent on an annual basis.
In the next period, the rise in wages and income will offset the now stabilizing price level, which is much higher than two years ago.
Cover image: The price list of the product included in the mandatory promotion starting June 1, 2023 in the CBA store in the Corvin Shopping Center in Budapest
MTI/Róbert Hegedüs
