From today, consumers will noticeably pay less for any of the food items covered by the profit margin cap, with the government's latest measure having come into force. The margin cap aims to curb excessive and unjustified price hikes: consumer price trends in February justified the government's immediate intervention.
Prime Minister Viktor Orban announced on March 11—barely a week ago—that the government had decided to limit retailer margins to a maximum of ten percent for thirty staple food products starting in mid-March.
In recent months, the margin on eggs reached forty percent, while for butter and sour cream, it exceeded eighty percent—PM Orban highlighted, adding that such levels were unacceptable.
For all food items where margins have soared, prices must now be reduced so that the consumer price does not exceed the purchase price by more than ten percent. The government will monitor compliance with this regulation.
In a radio interview last Friday, the prime minister made it clear: if the profit margin cap fails to yield results, the government will introduce tougher measures. This could mean a price cap, which would impose government-regulated price limits. However, this approach has drawbacks, as retailers could shift their losses onto producers, which is not possible under the retail margin cap regulation. Viktor Orban stated that the government has a response to this as well: if the profit margin cap is extended to all food products, such a maneuver becomes impossible.