Croatia clashes with retailers over post-euro ‘wild’ value hikes

The Croatian authorities and companies are at loggerheads as merchants dismiss measures geared toward battling value hikes after the introduction of the euro by blaming inflation.

Prices rose as quickly as Croatia changed its kuna foreign money with the euro on 1 January, as merchants rounded up costs within the new foreign money.

Croatia in throes of euro value hikes Barely 48 hours after adopting the euro, Croatia discovered itself within the throes of rising costs that angered residents, client safety teams, and the federal government. The third day of Croatia’s eurozone membership introduced widespread fury over the most recent value hikes associated …

It prompted the federal government to take measures in opposition to merchants on 5 January, warning them it might introduce fines, cancel power subsidies or increase taxes until they returned costs again to pre-euro ranges.

The retailers’ affiliation has dismissed the federal government’s accusations, saying its members usually are not elevating costs to make revenue however relatively as a result of rising value of uncooked supplies and power.

Croatia, with annual inflation recorded at 10.8%, reported one of many highest inflation charges within the EU final yr.

Martin Evacic of the commerce sector of the Croatian Affiliation of Employers has mentioned costs went up solely on a small variety of merchandise.

“Costs in 2022 rose by 15% to twenty%. They definitely didn’t rise in the course of the conversion interval,” Evacic informed Croatian media this month.

“I don’t suppose this can be a warfare between the federal government and merchants, that is the strain by the federal government and its must do one thing to halt inflation,” he mentioned.

Nonetheless Igor Vujovic, the president of the Croatian shoppers’ affiliation, mentioned shoppers had been going through costs rising by 5% to twenty% a day, relying on the product. “Costs are getting wild,” he added.

Neighbouring Slovenia, which was the primary amongst japanese EU members to introduce the euro in 2007, additionally reported an elevated inflation of seven%-8% after becoming a member of the euro zone however managed to decrease it inside three months.

After two weeks of elevated controls, Croatian inspectors discovered that about 40% of companies had unjustifiably hiked the costs and fined them 234,000 euros. The nice for corporations is €26,000 and as much as €1,090 euros for particular person merchants.

“Elevating costs, overshadowing the introduction of the euro and contributing to inflation, it’s an unfair observe and won’t be allowed,” Prime Minister Andrej Plenkovic mentioned on Friday.

He mentioned quite a lot of merchants had introduced their costs down from the tip of December.

Konzum and Lidl, the 2 main meals retail chains in Croatia, mentioned in separate statements they’d not raised costs after 1 January.

Nonetheless, with shoppers battling the price of dwelling, consumers have additionally seen the distinction.

“I’ve seen the rise in meals costs,” mentioned Zagreb resident Domagoj Bregant whereas buying on the capital’s meals market. “It is a downside as a result of meals is basically costly relative to my present wage.”

Some opposition leaders have criticised the federal government for introducing the euro at a time of excessive inflation and the power disaster triggered by the warfare in Ukraine, whereas not reforming its financial system sufficient.

The federal government has lengthy advocated the benefits of utilizing the euro, saying it might strengthen the financial system, enhance the funding local weather and make Croatia extra proof against exterior shocks.