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Coronavirus: Demand and Profiteering Pull Prices Up

Ábrahám Vass 2020.03.19.

Due to the highly increased demand, panic shopping, and perhaps also the profiteering of certain sellers, the price of certain products, chicken meat, face masks and hand sanitizers most and foremost, have begun to climb. Experts, however, expect that soon prices could return to normal.

It first made headlines yesterday, that a reader of 168Óra spotted a butcher in Budapest’s Lehel Market asking HUF 2798 (Eur 8) for one kg of chicken breast fillets, which is at least one thousand forints and 50% more than a few days ago. Afterwards, Index also spotted high prices at the Fény Str. Market (2298 forints- Eur 6,5). The portal asked marketers who blamed the shortage of goods (while they have still to pay renting fees, etc.).

While these aforementioned prices are exceptional, and don’t really affect prices in the large supermarket chains, Index note that they fit into a tendency, as at the beginning of the year chicken breast only cost 1400 ft (Eur 3,9) on average. Although it has started to increase slightly, it has sky-rocketed over the last weeks.

Only logistical problems

Attila Csorbai, Director of the Poultry Product Council, told Index that they have yet to experience the hike from the industrial end, so he doesn’t know about the extent of margins traders make. At the same time, there may be certain people who seek to take advantage of the situation, which will definitely cause increased demand.

The state of emergency has changed shopping habits, he explains, as in the first few days, many people tended to panic-buy and may be storing up to 20 kilograms of chicken. This increase in the demand, however, has resulted in logistical problems as suppliers are unable to deliver the orders.

However, the coming weeks will bring a return to normalcy, Csorbai claims. He said slaughterhouses are well in operation, production is ongoing. He also revealed that there are many chicken products for public catering, but due to the school closures, this stock is still to be reallocated.

In addition, the price of pork may also increase; that, however, is not related to the coronavirus as it tends to be rising for a year now.

Operational board keeps an eye on sellers

The price of certain sanitary and protective products is also going up, as several stores and pharmacies face shortages. This may also lead to certain sellers trying to bag more money for products than usual. In an angry Facebook post, dotted with grammatical errors, pop star Majka complained that an unnamed pharmacy asked 38 thousand forints (Eur 107) for two packages (50 pieces each) of face-masks. This adds to the hand sanitizer prices that also went up in certain stores, at some places costing 1000 forints (Eur 2,8) for one small bottle.

The topic was brought up at the operational board’s press conference yesterday, too. The head of the emergency center, Tibor Lakatos, confirmed that they are carrying out consumer protection checks to deal with those who make unjustified price increases, and on the other hand, to verify that the offered products are fit for purpose (e.g. hand sanitizers). The Innovation and Technology Ministry (ITM) also promised to take action, if needed. According to its Consumer Protection department, for example, there is no shortage of chicken breast and they are keeping an eye on the pricing of durable foods, disinfectants, and household items.

featured image via MTI/Attila Balázs