Czech households are bracing for further challenges as food prices, already a concern, are anticipated to surge from January, despite a reduction in VAT from fifteen to twelve percent. The looming increase is attributed to a substantial rise in energy prices, which is expected to reach significant levels for various businesses. Dana Večeřová, President of the Food Chamber of the Czech Republic, highlighted this concern during a discussion program on Czech Television.

Večeřová emphasized that while the price hike may not be sudden, a decrease in prices cannot be anticipated. Tomáš Prouza, President of the Trade and Tourism Union, echoed these concerns, noting that any escalation in energy prices would translate into a notable increase in food prices. Prouza underlined that several suppliers have already conveyed similar sentiments. He pointed out that the rise in food prices wouldn’t be solely due to energy costs; starting January, there would also be increases in taxes on property and profit, coupled with changes to employment agreement rules mandated by the government.

Contrastingly, Agriculture Minister Marek Výborný (KDU-ČSL) expressed a different viewpoint, asserting that there is no apparent reason for food prices to rise. He suggested that companies should refrain from attributing potential increases to energy prices, noting that they have already reached the EU average.

Dana Večeřová criticized a recent comparison of food prices in Germany and the Czech Republic presented in a video by Prime Minister Petr Fiala (ODS). In Germany, the VAT on food is seven percent, and Poland has temporarily reduced the rate to zero until the end of the current year. Večeřová pointed out that such variations lead to long-term purchases by Czech consumers abroad, impacting the domestic market. As the Czech Republic navigates these economic dynamics, stakeholders and policymakers are faced with the challenge of balancing consumer affordability with the broader economic landscape.

Article by Prague Forum