Maximum price limit on the shopping products in Hungary

On February 1, maximum prices for several categories of food products entered into force in Hungary. There is no compensation for sellers, so they have to bear the cost of the increases in goods. At the same time, the first discount store introduced a limit on the number of products purchased.

Each country is looking for its ways to fight inflation – even if not for its causes, at least to make its residents feel less uncomfortable from high prices. Hungary considered the Polish method of cheaper shopping, i.e. lower VAT and went much further: introduced maximum prices for some products. Flour, cow’s milk 2.8%, sugar, sunflower oil, pork leg, and chicken breast cannot cost more than they cost in a given store on October 15, 2021.

This rule was announced by Prime Minister Viktor Orban in the first half of January. Shopkeepers had three weeks to prepare for the new rules to come into force.

There is no provision for any compensation for shops. So if in mid-November sugar cost 10 forints, but for two months its wholesale price jumped by 10%, the store has to raise the price.

This put businesses, especially small ones, operating outside the chains, in a very difficult position. In search of lower prices, they made large purchases in supermarkets, which can have more advantageous prices than wholesalers. However, this drives a purchasing spiral and leads to a lack of stocks in stores, so some stores restrict purchases per customer.

This is not the only element of the government’s anti-inflationary policy. Earlier, a maximum fuel price was set and interest rates on loans were frozen. At the end of last year, inflation in Hungary stood at 7.4 % and was the highest since 2007.