ZAGREB, 18 Feb 2022 - Retailers won't increase their margins and the price of food will go down, the Večernji List daily reported on Friday, citing the Lidl supermarket chain which has announced lower prices as of March already, one month before the government's decision to cut VAT rates on certain food products goes into force.

Prices for all categories for which the government has decided to lower VAT will certainly fall. Retailers will not increase their margin because nobody can afford to be more expensive than their competition, and when margins remain stable, prices will decrease by the difference in VAT, the president of the board of the NTL supermarket retail chain, Martin Evačić, said.

The government's measures announced earlier this week foresee VAT to fall as of 1 April, from 13% to 5%, on fresh meat and fish, eggs, fruit, vegetables, edible oil, lard, and children's food, and also in agriculture (seedlings, fertilizer, pesticides), while VAT on butter and margarine will decrease from 25% to 5%.

Evačić, who is the president of the Retailers' Association at the Croatian Employers' Association (HUP), underscored that the concentration of retailers on the Croatian market is too high and that consumers watch how they spend every kuna. The lower VAT will mean a decrease in budget revenue, however, with the lower prices demand could be greater, which could offset the effect of the lower revenue and ensure the same profit for retailers.

Some retailers have announced the price of flour and bread could go up again in March by an average of 10% so we are yet to see if some of the government's measures will prevent that increase, Evačić says.

The Konzum supermarket retail chain has announced that it will reduce the prices of more than a thousand items as of Monday, 21 February, including fruit and vegetables, meat and fish, eggs, edible oil and lard, butter and margarine, children's food, and hygienic pads and tampons.

For more, check out our business section.

August the 7th, 2021 - Croatian food prices have been steadily rising, and some footstuffs and ingredients that everyone regularly purchases and has in the kitchen cupboards have risen by a staggering 100 percent.

As Poslovni Dnevnik writes, key foodstuffs and common ingredients such as cereals and oilseeds have risen dramatically of late, and their prices in Croatia are currently 20 to 100 percent higher than they were just one year ago, according to weekly indicators from the Ministry of Agriculture.

Given that cereals and oils are an integral part of many food products, experts fear that the jump in their prices in the autumn will trigger a number of subsequent jumps in Croatian food prices in many stores, which has the potential to jeopardise the living standards of the country's residents.

For example, in the week ending on August the 1st, one kilogram of wholesale wheat cost 1.4 kuna, which is 21 percent more than at the end of July last year. Corn is currently being sold for 1.63 kuna per kilogram, which means that it is 42 percent more expensive than it was just 12 months ago.

This is the highest wholesale price of corn recorded in Croatia in the last seven years, Tugomir Majdak, state secretary at the Ministry of Agriculture, recently noted.

The price of barley jumped 28 percent. Sunflower seed meal, which sold for 2.8 kuna per kilogram in the spring, has actually become cheaper in recent weeks, but it is still 27.5 percent more expensive than it was last year. The price of soybeans increased by about 100 percent in a year, while rapeseed oil rose by 53 percent at the same time, Novi list writes.

Consumers were surprised when they recently noticed the price of a liter of oil had jumped from 11 to 16 kuna overnight, signalling legitimate concerns about more Croatian food prices rising, especially as this is one of the main worries people have about Croatia joining the Eurozone.

However, it should be said that other food products have not become significantly more expensive, as it often takes several months for retailers to run out of supplies and to put new, more expensive consignments of food obtained from producers on their store shelves.

For more, follow our lifestyle section.