In the statement, the ministry highlighted that the 1.3% year-on-year increase in food prices was the lowest since January 2017 and argued that the caps had significantly contributed to reducing inflation.

SZÉP card vouchers will be available to buy cold food items until the end of April, the statement added.

However, OKSZ, the retailers’ association, protested that the decision had been made without consulting the sector.

The profit margin cap is a “superficial” and “short-term” tool that is ineffective in the long run, as it does not address supply chain inefficiencies, price pressures from suppliers, or the effects of income outflows, OKSZ argued, adding that the most effective way to manage inflation is through “healthy competition”.

When asked by Portfolio, the Tisza Party also stated that long-term state interventions, such as a price cap, are incompatible with a functioning market, but that the phase-out should be carried out in a way to minimise price increases.
 

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