[AMNA]
The profit margin cap – and possibly other measures or initiatives taken in the past such as the “price reduction” and the famous “baskets” – may ultimately lead to an increase in prices or at least not to their expected reduction.
This is not only because of the increased administrative costs the implementation of the measures entail, as supermarket chains claim, but because, simply, they are not charities, nor nonprofit organizations and therefore in some way must preserve, if not enhance, their profitability. “Businesses may choose to reduce prices on certain agreed products by following pricing policies in line with government initiatives, but at the same time increase prices on other products to maintain overall profit margins,” said the report of the Bank of Greece governor on Monday.
Although in Greece the profit margin cap has applied since 2020 and with an expanded effect from 2022, food inflation increased by 33.4% in the period 2020-2025 compared to an increase of 30.8% in the eurozone.
The cap, even in the current conditions, does not apply to all supermarket product categories, but to 59 categories, 46 of which concern food, while even within a more general category, some subcategories have been excluded.