Grocers warn that rising energy prices will stop food from becoming cheaper

Grocers warn that rising energy prices will stop food from becoming cheaper
Grocers warn that rising energy prices will stop food from becoming cheaper

From the beginning of next year, food prices cannot be expected to fall, when energy prices are expected to rise. Therefore, the reduction of the value added tax (VAT) by three percent cannot take effect. This was said by the president of the Food Chamber of the Czech Republic, Dana Večeřová, on the Czech TV program Otázky Václav Moravec. Minister of Agriculture Marek Výborný (KDU-ČSL) said that, on the contrary, he sees no reason why food prices should rise. According to him, companies should stop making excuses about energy prices, because they have reached the EU average.

Večerová stated that the recent decline in food prices was mainly due to the functioning of the market, not government pressure, which both Výborný and Prime Minister Petr Fiala (ODS) spoke about several times. On the contrary, rising costs led to the increase in prices, she added. Therefore, in a situation where, according to the latest information, energy prices for companies are expected to rise significantly, food prices cannot be counted on to decrease, she added.

The president of the Trade and Tourism Association (SOCR), Tomáš Prouza, noted in the same program that if there is still a great demand for cheaper food, traders must reach for imported goods. “And any increase in the price of energy will lead to an increase in food prices,” he added. He also pointed out that food companies will put further possible cost increases at a great disadvantage against foreign countries. The government’s consolidation package also brings higher income tax, changing employment rules to agreements and other changes, he added.

Lukáš Kovanda: Neighboring governments are looking for ways to relieve people from expensive energy costs. Fiala’s government is looking for reasons why it can’t be done


Unlike the Czech Republic, Germany, Poland and Slovakia will relieve people of expensive energy costs in 2024, they are also considering using the income from emission allowances – according to the Czech government, this is not possible. At the same time, all three countries in question are more indebted than the Czech Republic, emphasizes Trinity Bank economist Lukáš Kovanda.

Lukáš Kovanda

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The Energy Regulatory Office (ERÚ) recently announced that it proposes a year-on-year increase in the regulated component of electricity by 71 percent for households and by roughly 39 percent for gas, and the increase should be even more significant for large customers. Business organizations do not like the proposal and, according to the opposition, the situation is a failure of the government. However, Prime Minister Petr Fiala (ODS) stated that final energy prices next year will rise by a maximum of one percent compared to this year. The final form of the regulated energy component will be clear at the end of November.

The price of energy consists of a commercial component, which is determined by suppliers, and a regulated part, which is managed by the state. Next year, the regulated component of electricity should make up about 40 percent of the final price for households, while its share is around 20 percent for gas.

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The article is in Czech

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