The Ministry of Agriculture wants to extend the capping of the commercial addition to basic foods

Florin Barbu, the Minister of Agriculture and Rural Development, wants to maintain, for another 90 days, the capping of the commercial addition to basic foods, according to MADR sources quoted by Digi 24. According to them, the Minister of Agriculture will at the beginning of next week have a meeting with processors and representatives of hypermarkets in which they will discuss the possibility of extending the ceiling of the commercial addition, but also about which foods will be removed from the scope of the measure and if other products will be introduced in their place.

We note that the capping of the commercial addition to 14 basic foods was established by GEO 67/2023, which entered into force on July 31 last year for 90 days. Later, out of the desire to protect consumers from possible price increases of some products during the winter holidays, the Government adopted in October a new emergency ordinance by which it established the extension of the measure of capping the commercial addition for the 14 initial basic foods, in addition to which introduced seven more products, including the cozonac.

According to the normative acts that were confirmed by law by the Parliament, a law that was promulgated the other day by President Klaus Iohannis, the commercial mark-up rate applied by the processor is a maximum of 20% compared to the production cost of the product, calculated according to the accounting regulations in force . Also, the commercial surcharge applied cumulatively on the entire distribution chain, regardless of the number of distributors in the chain, is a maximum of 5% compared to the purchase price to which operational expenses are added, and the commercial surcharge applied by the trader at retail and cash&carry it is a maximum of 20% compared to the purchase price, to which the direct and indirect expenses of the trader are added; the discounts and refunds provided for in the law on unfair commercial practices between businesses in the agricultural and food supply chain will also be included in the maximum 20% commercial surcharge.

For agricultural and food products that enter the territory of Romania and are not included in the processing or slaughtering process, the commercial surcharge rate is a maximum of 5% compared to the purchase price, to which are added the direct and indirect expenses stipulated by law.

Among the agricultural and food products that are subject to the capping of the commercial addition are oil, sugar, flour, lard, pork, chicken, beef, for quantities of packaged product greater than 5 kg, respectively 5 l, cozonac, eggs, various fruits and vegetables.

During the period of application of the normative acts, the re-invoicing of agricultural and food products, as well as the services related to their delivery and marketing, is prohibited. Units issuing meal, gift and social vouchers, including those issued through the Support Program for Romania, regardless of the way in which the vouchers are issued, in electronic format or on paper, and their type, may apply to traders at the time of their settlement a commission of a maximum of 2% for all agricultural and food products that can be purchased with them, without being limited to the products provided in the annex to this emergency ordinance. The foreseen economic operators have the obligation to provide sufficient quantities of the products provided in the annex to the normative acts during the period of application of this emergency ordinance.

The provisions of the two emergency ordinances apply until January 31, 2024, but now MADR wants to extend the measure.

According to the statement of reasons, the measure of capping the commercial surplus was taken by the Government due to the increase in the prices of material resources used in agriculture, such as chemical fertilizers, fuels and pesticides, through the prism of the war in Ukraine, an increase that was reflected in the increase in food prices throughout the globe.

According to article 4 paragraph 3 of the Competition Law, for certain economic sectors and in exceptional circumstances, such as: crisis situations, major imbalance between demand and supply and obvious market dysfunction, the Government can order temporary measures to combat excessive price increases or even blocking them. Such measures can be adopted by decision for a period of 6 months, which can be successively extended for periods of no more than 3 months, as long as the circumstances that determined the adoption of that decision persist. When establishing the measure and at each extension, the Government must request the advice of the Competition Council, which is only advisory.