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Ankara steps in against unjustifiably high food prices

Ankara steps in against unjustifiably high food prices

Turkey’s Competition Authority stepped in against unjustifiably high food prices, which have dominated local headlines lately. It has prepared a 138-page sector report that includes suggestions to protect both producers and consumers. Accordingly, Trade and Agriculture Ministries will make legal arrangements while the Competition Authority will also issue a secondary legislation.

As part of the new legislation, maturity periods for the products will be reduced, a report by the Turkish language daily, Sabah said Saturday. Normally, chain markets take the payment from the citizens in advance but apply maturity to the producer. These terms of up to 60 days put suppliers in a difficult position. With the arrangement, maturity periods will be shortened. It will not exceed 30 days for perishable agricultural and food products, and 60 days for other agricultural products. Thus, the risk of cancellation of perishable foods, which is placed on the producers’ shoulders by the chain markets, will now be shared. The cancellation of orders will be limited to a certain period and standard.

The supermarkets in the country have also been demanding money to put the producers’ goods on the shelf in order to avoid taking responsibility and risk. Besides, the promotion they carry out within the scope of their own marketing activities is also added to the supplier’s advertising expenses. Some even make the supplier pay the wages of the employees who put the product on the shelves. New regulations foresee shelf fees, personnel fees or expenses borne by the markets and not the producers.

The number of the stores established by chain retailers will also be limited and a narrower geographical market definition will be made. Thus, the same supermarket chain will not be allowed to open a second store within a 1-2 kilometer area (0.62-1.25 miles), increasing compatibility and allowing space for the local tradespeople.

The hyper increase in the food prices in Turkey has caused a nationwide reaction, causing authorities to take action to preserve the citizens’ rights.

Most recently, on Jan. 30, President Recep Tayyip Erdoğan reiterated his frustration with what he said were major differences in food prices and warned that tradespeople could face heavy fines if they keep charging unjustifiably high prices.

“We see that there are very serious price differences in vegetables, fruits and legumes,” Erdoğan told reporters as he vowed that the government would protect its citizens from being crushed by high prices.

As a result of the audits carried out in the last 20 days, 250 companies were found to be charging exorbitant prices for 150 products. Those companies that do not make their justification within the given seven day period, which was previously 10 days, will be fined. While price controls are tightened, costs that affect food prices such as feed, logistics, brokerage fees are also closely monitored.

Turkey’s annual inflation rate climbed more than expected to 14.97% in January, according to official data while the food prices have hit citizens particularly hard and rose another 2.5% in a month and more than 18% in a year.

Presenting the first inflation report of the year last week, Naci Ağbal, governor of the Central Bank of the Republic of Turkey (CBRT) noted that rises in food prices were an important risk to overall inflation in 2021.

The bank raised its food price inflation forecast for this year to 11.5% from 10.5% in its previous report.