Croatian retailers are racing to reduce prices of food and non-food items after the government’s announcement of a reduction in VAT from 1 April.
Last week, Croatian Prime Minister Andrej Plenković presented measures to mitigate the rise in energy prices, worth almost HRK 5 billion (€640 million).
The VAT rate on fresh meat and fish, eggs, fruits and vegetables, edible oils and fats and baby food will be reduced from 13% to 5%; for butter and margarine from 25% to 5%; and for sanitary pads and tampons from 25% to 13%.
As well as reducing VAT on energy, food and various products, government measures will also include subsidies and vouchers.
Konzum Announces Price Reductions
Konzum, the country’s biggest grocery retailer, was first off the mark, lowering the prices of 1,000 items from 21 February, as part of an investment valued at over HRK 10 million (€1.3 million).
The competition did not take long to respond to Konzum’s announcement.
Both Lidl and Spar announced they would lower prices of some of products from the government list from 1 March, with the latter mentioning that it plans to reduce the prices of around 1,000 SKUs.
More retailers are expected to follow suit over the coming weeks.
The Croatian government's decision comes after price hikes of up to 30% for basic food goods in Croatia, following years of relatively stable prices, seriously impacting consumers and their budgets.
Most of the price hikes have been driven by suppliers rather than retailers as a direct result of rising oil prices on international markets, speculation and demand.