Leaving wages behind, the trend of prices in Romania has followed a steep upward curve over the last few years, in order to reach a level that is comparable to those in Western countries, according to an analysis in the most recent issue of BUSINESS Magazin, out today.
Customs duties, the lack of competition, the lack of legal procedures to set imported prices and tacit agreements between producers have caused and are still causing prices for various goods and services on the domestic market to be equal to, or higher than, those in other Western countries.
The main product categories that are "confusing" the market are either imported products, or those that target a market that is not really price sensitive, such as luxury cars or niche services provided by mobile telephony operators.
The analysts interviewed by BUSINESS Magazin agreed that although the market had stabilised in Romania over the last few years, business people still regard it as a small market, unsettled, with high risks and high interest rates, where entrepreneurs pursue fast investment recoupment rates. The prices, which average income consumers cannot seem to understand, in the context of the Romanian market, are those for the so-called "designer label" clothes, that remain extremely high, at a level only seen in Ukraine and Russia.
As a rule of international trade, if the manufacturer''s price is 100 euros, the wholesaler price is 200 euros, and the price in shops therefore amounts to 300 euros or more, depending on the retailer. This is because not even the creator of the brand can do much to influence the shelf price in various countries.
Most brands are brought in Romania via franchises, and the franchiser may not tell the franchisee what prices to operate. These prices, set depending on how much of a hurry the entrepreneur is in, in combination with the absence of real competition, drive up the prices of the products on the domestic market, as well.
However, it is not only the merchants that are the "villains" here, but the market conditions that make them charge high prices. Rents, utility prices (water, natural gas, electricity) and petrol are just some other price categories that are out of sync with the incomes of Romanians.
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