January 9, 2023 - Euro Croatia: although their wages are twice or three times higher than the Croatian average, the Germans, the French, and even the neighbour Slovenians spend 30, and for some products, up to 40 percent less money than Croatians for a variety of grocery items.
Slobodan Školnik, an expert on retail prices, comments on the reasons why: "Because our weak economy has to bear the heavy burden of an inefficient public sector and the state, which is too expensive for an economy at this stage of development, and all of this must be incorporated into prices and the lower standard of citizens."
If we take 450 grams of coffee as an example, we will pay 2 euros and 30 cents more in the same retail chain in Croatia. Croatia will be more expensive with cheese, where the difference is one euro and 72 cents. Eggs are 90 cents cheaper for our neigbours, ajvar 86 cents, and pasta is 56 cents cheaper. We would pay 11 euros and 75 cents for these five items in Slovenia and more than 18 euros in Croatia. This is a difference of almost six and a half euros for only five products, write Danas.hr / Poslovni.
Lower tax burdens
"It depends on supply chains, it depends on importers, distributors, who do their calculations; I don't think it's a problem with traders," says Ivica Katavić, president of the HGK Trade Association.
Many factors influence the differences in price, and cheaper shopping in Slovenia is primarily due to lower VAT.
"Slovenia has a lower tax burden on most products of daily consumption, the basic VAT rate is lower than in Croatia, especially food products rates, they are 9.5 percent, so significantly lower than in Croatia.", says Damir Novotny, an economic analyst.
An aggravating factor is that Croatia has almost completely neglected the processing industry and is dependent on imports, which further increases the price of food and high logistics costs.
"This means it is easier to supply the Slovenian market than the Croatian market. There are significant differences in prices between, say, Osijek and Dubrovnik - in some places, it will be three times more expensive due to logistics costs," adds Novotny.
So, going to the grocery store for basic groceries seems more and more like a luxury game.
"Some follow, some don't. Some make a mistake and set a price that is too high and then have to correct it, but sooner or later, the market solves everything where there is competition, and in Croatia, there is fierce competition", adds Školnik.
The problem could be that, at least for now, none of the retailers are announcing lower prices, but quite the opposite – a new wave of price increases.
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