Business groups oppose price caps proposal

Business associations have stated on Thursday that implementing a price cap on items sold at various locations would distort the market, following a cabinet decision to propose a bill to parliament on the matter.

The cabinet decided on Wednesday to promote a draft bill to parliament to set price caps on items like bottled water sold at airports, ports, pitches, remote beaches, theatres, cinemas, archaeological sites, and museums.

The draft bill is set to be sent to parliament for a discussion at the house committees.

Under the bill, the energy minister, who also oversees commerce, will be able to issue a decree specifying the products subject to a price cap.

Initially, the measure will only apply to bottled water, in 500 ml and 750 ml bottles. The maximum selling prices will be determined after a survey by the Consumer Protection Agency of the ministry, which will take into account production and import costs, a reasonable percentage for operating expenses, and a profit margin.

The industrialists and employers’ federation (OEV) said on Thursday to Philenews that the imposition of price caps on various products constitutes a distortion in the market’s operation, with negative consequences for consumers.

According to OEV Director General Michalis Antoniou, it deviates from the rational functioning of the market.

“Is there no competition on the beaches, at a time when there are many choices in restaurants, kiosks, bakeries, etc.?” he asked.

Antoniou believes there is no justification for the extreme decision to impose a cap. “Water is a basic commodity, and it does not make sense for the state to take such extreme measures; it is counterproductive in economies like ours.”

In response to the reactions, Energy Minister George Papanastasiou acknowledged the concerns, stating that “the trading world would like to have the freedom to set prices in a free market, but when it comes to products like water, some form of control is necessary because at certain outlets, some prices are unjustified.”

Chamber of Commerce, Keve general secretary Marios Tsiakkis said the chamber opposes the imposition of any cap but also opposes profiteering. He said that if the bill is approved by parliament, the minister should consider the costs and specificities of each market before issuing a decree.

“The cap cannot be universal and must consider the costs,” he said. He pointed out that the characteristics of airports are different from those of stadiums, highlighting that high prices do not necessarily mean profiteering.