The consumer will get the opposite effect of government intervention in the economy.
B Over the past year, some goods have risen in price to a record high in Ukraine. Among them are sunflower oil, vegetables, chicken, sugar. In this regard, the state introduced the regulation of food prices, but such measures may have the opposite effect, reports the Chronicle.info with reference to RBC-Ukraine.
This point of view was voiced by the president of the NGO « Ukrainian organization for the protection of consumers of services & # 187; Oleg Titamir.
«State regulation of prices for 11 types of products of social significance, such as wheat flour, buckwheat, granulated sugar, domestic pasta, chicken carcass, and so on, along with the limitation of the exchange price of domestically produced gas for a number of food producers — this is the extreme, most primitive and, moreover, very dubious and risky tool that the government resorts to», — the expert believes.
According to Titamir, the consumer will get the opposite effect from state intervention in the economy.
«Therefore, the effect for the end consumer of the administrative intervention of the government in prices looks very doubtful. After all, if producers raise the cost of bread, milk, vegetable oil, eggs, and so on, then all state regulation will collapse»,— he said.
Producers will be forced to raise prices, as no one is interested in working at a loss, adds Titamir.
«In addition, it is impossible to exclude such scenarios in which retail chains will negotiate with suppliers about «gray» purchase prices and shadow calculations, which will take into account the interests of the seller & # 187;, & # 8212; said the specialist.
Food shortages are possible
«If the underlying causes of price increases are not eliminated, if they are not compensated by comprehensive state support for food group producers, then attempts to regulate for a longer period may lead to a serious shortage of goods of the first necessary», — summed up Titamir.
How it worked before
Since 2016, a pilot project has been implemented in Ukraine to abolish state regulation of food prices. The Ministry of Economy in June 2017 reported that the suspension of regulation did not affect the price dynamics.
After that, the Cabinet of Ministers from July 1, 2017 canceled state regulation of prices for flour, bread, pasta, cereals, sugar, beef, pork and poultry meat, sausages, milk, cottage cheese, sour cream, butter, sunflower oil, chicken eggs.