The economist recorded critical reactions after the prime minister broadcast a comparison video of a purchase in Germany. For example, that Petr Fiala’s team is weaker in terms of marketing than former Prime Minister Andrej Babiš’s team, there were also opinions that it was an embarrassing act. “Even Deník N, which is closer to the ruling party, wrote an article with the title ‘Professor Nutella’… and so on,” Lipovská mentioned in her program Free market.
Subsequently, she started analyzing the factual content of this Fial video. “It is not at all certain whether the Prime Minister was just promoting German supermarkets, as the German media humorously claim: ‘Look, the Czech Prime Minister comes to shop here because it’s cheaper.’ And if he really went to that Czech supermarket as he claims,” after watching the video, Lipovská has certain doubts about manipulation by the Czech Prime Minister.
To prove that her doubts are justified, she plays a segment of Fial’s video where he announces that he is currently in Cheb and is going shopping at Tesco, which is a British chain, and the Russian store chain Mere also appears in the background. “He opened the Mere chain in Cheb this year with a relatively long delay, which happens to be a Russian chain that headed to the Czech Republic just before the beginning of the Russian-Ukrainian conflict. I believe that here the team of Prime Minister Fiala failed along the whole line, because to make an interpretation about food prices and to have behind the logo of a Russian chain of stores, which is famous for having the lowest prices on the market and for promising the lowest prices on the market, either is chucpe, or an absolute failure to master the craft,” Lipovská points out.
Specifically, he points to the economic mistakes that Prime Minister Fiala made in the mentioned video. His interpretation of the “scandalous price comparison and in Germany” is omitted from the recording. The problem, however, is that Prime Minister Fiala was not in any Czech chain, as we do not have one. “Prime Minister Fiala was not really in the Czech chain. We have two Czech food chains, one is Pub and the other is a small luxury food chain Delmart,” continues Lipovská.
“It is clear that due to the bad economic policy of the Czech government, unfortunately also the past one, but also of course the current one, and due to the setting of VAT, due to the size of the Czech market and a whole host of other factors, prices on the Czech market are currently aggregated higher than on the German market.” According to Lipovská, the emphasis must be placed on the word “aggregated”.
“The prime minister’s team let him make a clown out of himself in a completely unnecessary and undignified way, they selected nine specific products, moreover not completely typical, and wanted to demonstrate the difference in price levels on nine products. This is not how it is done in economics, we compare price levels as a whole,” adds Lipovská. In the comparison video, the prime minister was buying, for example, Nutella chocolate spread or a bottle of Coca-Cola.
Thus, while in the Czech Republic Fiala shopped at the British Tesco chain, in Germany, according to Lipovská’s findings, he went to the Aldi chain, which operates as Albert in the Czech Republic. “So the most fundamental mistake that the Prime Minister made was that in the small German town of Waldsassen he visited, let’s say, the Czech Albert, i.e. Aldi, which is a Dutch company that is known for keeping the lowest prices in Great Britain and Germany market. And he visited the British Tesco in the Czech Republic. On the Czech side, the Prime Minister was able to visit Czech Albert, who is also there, in Cheb. And he could and should have compared the same stores,” says the economist.
So it turns out that the problem pointed out by the prime minister in the form of high prices in Tesko in Cheb and in Albert in Germany is not so much determined by the language spoken in the respective store, but rather by which chain. “If we look at his Nutella, in the Czech Republic Nutella in Tesco 300 g costs 99.90 crowns and Nutella in Alberta costs 69.90 crowns. And be careful, if you have a Tesco club card, you can buy it for 59.90 crowns,” Lipovská gives as an example. According to the results of her research, Nutella with higher weight is a very similar story.
Regarding the fact that Fiala dwells in the video on the fact that the German Nutella has an atypical weight of 750 g for us, Lipovská clarifies: “In the Czech Republic, it is not sold in this weight on the Czech market, it is imported from Germany. It can be purchased from us in online stores, and there the price ranges from 120 to 220 crowns. Logically, because we have to import it when it is not on our market,” she said, adding that Nutella is also used as a different food on the German market than on the Czech market: “It is used with a different intensity, it is, for example, family packaging and simply has a different end consumers, so it is adapted to that market, not only in composition, but also in weight,” he adds.
Related to this is the second thing that one of his advisers should tell the prime minister. Namely that Nutella does not manufacture its products in a central factory somewhere in Australia and then distribute them throughout Europe. Nutella has its factories specifically for the German market and specifically for what they call Eastern European markets, which includes the Czech Republic. “So Nutella will be imported to Cheb from Warsaw, where there is a Nutella factory for our market. The Nutella that the Prime Minister bought in Cheb traveled 814 km, while the Nutella he bought a few kilometers further in Germany traveled only 350 km. It’s strange to wonder, like a May kitten, that the journey costs something,” notes Lipovská, who in her program also analyzes other foods that the Czech prime minister used for price comparisons with our western neighbor.
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author: Natalia Brozovská