The government is once again interfering with the trade policies of private companies, issuing an ordinance to cap the profit margins on seven imported staple foods. Weak reaction from the business community

Prime Minister Marcel Ciolacu announced on Friday that the government is adopting an emergency ordinance to introduce a maximum 5% trade markup on oil, sugar, flour, cornmeal, pork, chicken, and beef, which are imported in bulk and not processed in Romania. Additionally, the government is extending the limitation on the trade markup for basic foods by another three months.

The government’s decision marks another interference in the trade policies of private companies, following the summer restriction on the trade markup for 14 basic foods.

It’s noteworthy that the business sector responded weakly to the government’s decision, accepting without significant protests this second intervention by the executive branch into private businesses.

Prime Minister Ciolacu justified the decision to cap trade markups by the need to curb rising food prices.

In the rationale for the emergency ordinance project, one of the reasons for capping the markup is that „during this period, traditional foods like sweet bread, stuffed cabbage rolls, and pastries are consumed, which require ingredients such as sour cream, minced meat, rice, tomato broth, margarine, and yeast.”

The government cited in the rationale the „risk of a sharp increase in food prices, a trend observed during the winter holidays, which can cause significant imbalances between supply and demand in the agri-food product market, severely impacting the end consumer, particularly the vulnerable ones. This determines the need for urgent, temporary measures to mitigate these effects.”

„The National Institute of Statistics data shows that the measure had the desired effects. We’ve halted the excessive rise in food prices. This government cannot support the speculative practice of importing cheaply and selling at a high price,” stated Marcel Ciolacu at the beginning of the cabinet meeting.

„We are adopting a measure through which we continue to protect purchasing power. We are extending the limitation on the trade markup for basic foods for another three months and expanding the measure to include more product categories, increasing from 14 to 21. We have all the reasons to continue with this measure. Additionally, we are introducing a maximum 5% trade markup for oil, sugar, flour, cornmeal, pork, chicken, and beef, which are imported in bulk and not processed in Romania,” Ciolacu added.

Read here the draft of the Emergency Ordinance.