At the outset, it must be admitted that food prices are gradually converging and that the differences are no longer so great. However, this does not mean that the standard of living of Czechs has jumped at comparable food prices. That’s not it. It is still true that the average wage in Germany is more than double the average wage here. And if we move from food to the drugstore, then the comparison is much sadder. The prices of drugstore products and cosmetics are up to tens of percent higher here. I don’t want to deal with the causes now, although they are of course important. What is certain is that the market fails and these price differences will not just disappear. That’s why we have to do something about it.
With the European elections coming up, we have a chance to raise this important issue again and push for measures to help stabilize prices. I am not talking about enforcing the same prices and introducing central market management. Not at all. But I want the prices to be fair for Czech citizens and that especially large chains do not abuse their position on the market.
Here are five concrete suggestions on how to achieve this.
1. Transparency of pricing policy
The EU needs to strengthen rules on price labeling to make it easier for consumers to compare products across countries, not only in terms of price, but also origin, composition or weight.
2. Unification of value added tax rates
Differences in VAT rates in individual EU countries undoubtedly have an effect on the final prices of food and other products. The EU should follow the path of harmonizing VAT rates, at least in the case of food and basic consumer goods.
3. Limiting monopoly practices and abuse of market power
The EU must be unyielding when it comes to the abuse of a monopoly position or significant market power, especially in the case of chains. The same applies to possible cartel agreements and the artificial maintenance of high prices.
4. Strengthening competition and cross-border trade
More competition means more choice, hence downward pressure on prices. However, the interconnectedness of border regions, better transport links and facilitation of logistics can also help. In short, the point is that competition operates within the EU regardless of borders.
5. Support of local producers
Here we can include a fair environment for farmers, which simply does not exist when comparing the conditions in individual EU countries, but this also includes support for small and medium-sized enterprises, either in the form of subsidies or through the reduction of bureaucratic burdens.
Of course, there are no simple solutions, just as there is no one hundred percent cure for ensuring fair prices for food and other products. But this does not mean that we should wait with folded hands for “it will resolve itself”. I am convinced that my proposals can help to at least reduce the price differences between the Czech Republic and Germany, but they can also contribute to the overall improvement of the EU internal market.
Tags: ensure fair prices hypermarkets
