There was a remarkable interest from Member States at the GVH’s international workshop on food inflation. The online event was attended by more than 50 experts representing competition authorities from almost all the EU member states. The lessons learned from several recent market studies in Europe, including the accelerated sector inquiries in Hungary, were presented at the workshop. The sector continues to attract strong attention from competition authorities, based on ongoing investigations in EU countries.
“Sharing the competition authority’s knowledge on investigation methods and experience has perhaps never been more important,” indicated László Bak, Vice-President of the GVH at the opening of the international online workshop. The Vice-President said that inflation remains a major challenge for member states, in particular for central banks and economic policy makers, however competition authorities cannot remain idle. Even if the latter cannot provide the ultimate solution to the problems, they can also address them through their competition policy instruments that mainly includes strengthening competition that can lead to lower prices. Learning about and discussing the best practices of individual authorities can therefore lead to very useful and beneficial results.
Experts from the Czech Office for the Protection of Competition (UOHS) presented the recent experiences in the Czech Republic. They pointed out that there are strong and broad expectations on competition authorities to address inflation and it is, therefore, essential to clearly communicate what a competition authority can and cannot do (e.g., cannot directly reduce prices or judge the legitimacy of profit levels). A recent Czech market investigation in the food sector examined the market structure, market shares and possible dominant positions for five products (milk, butter, eggs, chicken meat, flour) over a five-year period, as well as the development of private label and speciality products. The Czech competition authority’s experts pointed out that the UOHS did not examined the profit of the players, but rather the total markups (the difference between input and output prices) and price transmission (the level and symmetry of cost shifting to consumer prices).
Zombor Berezvai, Chief Economist at the GVH, presented the methodology and the main results of the Authority’s accelerated sector inquiries. The GVH recently concluded two analyses of the domestic dairy and preserved food markets. The Hungarian expert said that the findings showed that the main reason for the price increases was an increase in the input costs of production. At the processor level, costs and output prices moved broadly in line, while at the retail level, retailers’ profit levels increased for only a few products in 2022. The GVH expert said that, based on the findings of the investigations, the national competition authority has made several proposals to strengthen competition and, hence, reduce consumer prices.
Following the Hungarian experience, an expert from the Romanian Competition Council presented the functioning of the price monitoring platform. The application also served as an example for the public online price monitoring system to be launched in Hungary on 1 July. It has been operational in Romania since October 2019 for certain retail products and fuels. The Romanian expert gave a detailed presentation of the technical functioning of the platform, which is available both as a mobile app and on desktop, and of the database methodology.
After the presentations, the workshop provided the opportunity for the participants from the national competition authorities to ask questions and share their experiences. The presentations showed that several EU competition authorities are keenly interested in the solutions and methodologies used by the competition authorities for food inflation, and that the GVH’s current experiences are, therefore, in the focus of international professional interest. The presentations were followed by a very active discussion among the participating competition practitioners.