Head of Competition Council: Regulated prices are the main inflation drivers, not food prices

The head of the Competition Council says he is considering revising the law that regulates relations between retailers and producers in the agri-food sector - which everyone saw as a promise from the authorities that food would become cheaper.

After nearly one year since the enforcement of the new law in food retail, which regulates more strictly relations between the big store chains and their local suppliers, the effects of the legislation change are non-existent on the market. Bogdan Chiriţoiu, chairman of the Competition Council (CC) and one of the key people involved in this project, admits that there are no effects, but says Romania's inflation problem does not lie with food prices, but with regulated prices, such as those of energy and gas. The Competition Council does not, however, have any power to intervene in the mechanism of regulated prices.
The annual inflation rate climbed in August to 7.58%, the highest level of the past two years, show data from the National Statistics Institute (INS). The VAT hike from 19 to 24% caused the Romanian economy to have the biggest inflation in the EU. The head of the Competition Council points a finger at market regulatory bodies and says the "good news" is that the price of food is rising at a lower pace than production costs.