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Model Israel: App to lower food prices in Austria

Model Israel: App to lower food prices in Austria
Economics Minister Martin Kocher (VP)
Image: EVA MANHART (APA)

In addition to the threatened loss of revenue from energy companies and a food transparency report, Chancellor Karl Nehammer (ÖVP) and Vice-Chancellor Werner Kogler (Greens) also announced last Wednesday after the Council of Ministers that further transparency measures to strengthen competition will be developed.

Last Friday, Kocher met representatives of the Federal Competition Authority (BWB) and a group of competition economists to talk, among other things, about more transparency in the food sector. “It has to be well thought out,” said the minister. As an example, he pointed to a smartphone app on food prices in Israel that caused the price level to drop by a few percentage points.

Also include origin and quality

Some experts would advocate showing only one shopping cart in a price calculator, so that supermarkets cannot “coordinate” their prices, said the Economics Minister. Other experts would recommend full price transparency for milk, eggs, butter, cheese, flour, fruit and vegetables so that consumers can adjust their purchasing behavior accordingly. In contrast to the fuel price calculator in Austria, the “heterogeneity” of the products, such as origin and quality, must also be recorded for food, says Kocher. It cannot be the goal that “fewer Austrian products are bought”.

According to the Economics Minister, a price calculator for groceries in online retail can be implemented more quickly than a database for supermarket prices. “It doesn’t have to come at the same time.” According to Kocher, “a legal basis is needed” so that supermarkets can report their prices for staple foods to the Ministry of Economic Affairs or the competition authority, for example. He referred to statements by Chancellor Karl Nehammer (ÖVP) that measures are now necessary that will take effect in the autumn.

Induce supermarkets to reduce prices

In the medium and long term, “the right measures” would have to be taken in competition law, said Kocher with regard to market power control and industry investigations by the Federal Competition Authority (BWB). Possible improvements are, for example, the extension of the obligation to register company mergers or the upgrading of the instrument of the industry investigation, the authority said on APA request. “The BWB is happy to offer its expertise for the legal implementation of specific legislative proposals.” In the short term, however, it is now a question of companies being persuaded by measures to pass on lower price increases or lower prices to customers, according to Kocher.

Suspension of VAT is currently not an issue

The suspension of VAT on staple foods – as demanded by the opposition and trade unions – is still not an issue for the Economics Minister. This is socially “very little accurate” because people with higher incomes and higher food expenses would benefit much more from a food tax cut. Kocher categorically did not want to rule out a reduction. No one can say what will happen in the future. “Right now I don’t see it.” The FPÖ criticized the statements made by the Economics Minister. “It shouldn’t be an argument that the rich would also benefit from a reduction in VAT on staple foods,” said FPÖ leader Herbert Kickl in a broadcast. The FPÖ politician again called for an immediate reduction or a temporary cancellation of VAT on staple foods and energy.

Industry representatives: Tax should be permanently abolished

Trade Association Managing Director Rainer Will pleaded in the Ö1 “Morgenjournal” on Monday not to temporarily abolish VAT on food, but to reduce it permanently. The head of Rewe Austria (Billa, Penny, among others), Marcel Haraszti, brought up a reduction in VAT for staple foods last year. Haraszti renewed his proposal last week.

How often the food transparency report announced by the government will appear is still open. “We are still working on the framework for the food transparency report. The aim is for it to appear at regular intervals,” said the Ministry of Agriculture when asked by APA. The transparency report will publish the purchase prices of the food trade based on defined foods based on the Agricultural Market Transparency Ordinance.

WKÖ chairman: Don’t just focus on retail

The chairman of the WKÖ trade association for the food trade, Christian Prauchner, insists on a differentiated approach to the subject of inflation. “Currently, the focus is always on the last one in the value chain, the food retail trade,” says Prauchner. The problem, however, is that the higher energy prices are affecting the entire chain, from the farmer, the processor, to the wholesaler and the food retailer. “It starts with higher raw material prices, higher transport costs, more expensive purchase prices and extends to higher wages and more expensive cooling costs,” said the Chamber of Commerce representative. If you take transparency seriously, then you would have to break down these costs as well.

Source: Nachrichten

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