October the 8th, 2022 - Ivica Katavic from the Croatian Chamber of Commerce (HGK) has attempted to explain just why Croatian food prices are extortionate at the moment, even when compared to the prices of the same items elsewhere in Europe. Contrary to popular belief, ridiculous Croatian VAT rates aren't the only thing causing the issue during these difficult times dominated by inflationary pressures.
As Poslovni Dnevnik writes, we're currently witnessing an increase in the price of almost everything, almost every single day we end up unpleasantly surprised by a new, noticeably higher price of some very ordinary ingredient or food. This year, the Republic of Croatia recorded the highest inflation rate since the Central Bureau of Statistics has been tracking and keeping hold of this data, and mostly all of this is a consequence of rising fuel and food prices. However, even when the price of fuel on the market falls, the prices of groceries seem to remain very much same for regular consumers in stores, reports HRT.
''Croatian stores have their margins which are the same as they were a year ago, but something happened in the supply chains where the prices rose significantly, where the price inputs of the items went up a lot. Ivica Katavic, president of the Trade Association at the Croatian Chamber of Commerce explained, adding that he believes that fuel prices are among the more minor items when it comes to price increases at this moment in time.
"Although it was expected that there would be significantly higher price increases, the Government entered into a price policy, and they then stabilised. Croatia is a small market, there are few traders who can enter a foreign factory and lease the quantities for which that factory would be interested in supplying. Most of the products that are imported go through distributors and intermediaries. Everyone charges their own margins, has employees to pay, warehouses where there are additional costs. When these goods reach our market, when Croatian distributors deliver them to retailers, and then the prices are significantly different from those in the EU," he said.
He pointed out that companies had not previously calculated the spiralling costs of energy sources into their prices, which are only expected to increase, particularly in the case of electricity and gas.
"I hope that this is slowly coming to an end. It's noticeable that there wasn't so much of an increase in September. That was the time when Croatian producers were also preparing for the rise in the prices of energy products and factored this into their prices and delivered them to the market. Now we'll slowly have a more normal situation, although the increase in energy prices is yet to come," said Ivica Katavic.
He emphasised that traders' earnings are falling and they need to do something to make up for their continuing losses.
"It's not right to put the burden exclusively on the backs of the traders. On a daily basis, we received new price lists that we had to comply with. By law, the store cannot go below the purchase price. Some margin has to be put up there. I'm aware of the situation, and I hope the situation will improve," he said.
Ivica Katavic is also of the opinion that people in Croatia are aware of the war in Ukraine and that it has consequences for prices of various good sold here in Croatia.
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