The Cyprus Consumers Association has accused the authorities of failing to adequately monitor the introduction of zero VAT on five additional categories of essential goods, arguing that the measure has not been fully passed on to consumers.

In a statement, the association said its monitoring of prices between September 30 and October 17 had identified price increases before and after the measure came into effect, as well as reductions in VAT that fell short of the full benefit expected by shoppers.

The finance ministry announced the additional cost-of-living support measures on September 30, with the zero VAT rate on the five extra categories taking effect after midnight on October 11.

The association said average prices for eight products increased by between one and seven cents between the announcement and October 11, the day before implementation.

On the first day of the measure, October 12, the average VAT reduction recorded was just 3.76 per cent, rising to 4.3 per cent on October 13 and 4.5 per cent on October 14, it said.

Three days after implementation, the association also identified three products whose average prices had increased by between two and four cents.

Dispute over official assessment

The association’s findings contradicted a public statement by the Consumer Protection Service, which said the day after the measure took effect that its implementation had proceeded smoothly.

“The implementation did not proceed smoothly, as the average reduction on the first day was below 4 per cent instead of 5 per cent,” the association argued.

On October 15, three days after implementation, the Consumer Protection Service, which operates under the trade ministry, issued a written announcement saying the measure had been implemented to a very large extent.

It also published a table of prices recorded by the service.

The consumers’ association said its analysis of that table raised several concerns, including that prices had been recorded only on October 7 and October 14, seven days after the measure was announced and three days after it took effect.

It added that four of the ten supermarkets included in the table showed minor or substantial deviations from full implementation of the measure.

Price increases were also recorded for three products after the measure came into effect, while two supermarkets had not reduced the prices of bakery products even three days after implementation, according to the association.

The association questioned whether the service’s conclusion that implementation had proceeded smoothly reflected a recurring approach to monitoring prices.

“Is the Consumer Protection Service’s conclusion that everything proceeded smoothly simply its usual practice of announcing that all is well, both with fuel and with product prices?” it asked.

Call for subsidies to reach consumers

The association acknowledged that there was no specific breach in the way prices were set, adding that retailers were free to increase prices at their discretion.

However, it criticised the finance and energy ministries for what it described as a failure to ensure that subsidies intended for consumers reached them in full.

“It is inconceivable that, despite the Cyprus Consumers Association’s repeated public warnings and appeals that measures intended to subsidise consumers must benefit consumers in their entirety, the ministries have once again demonstrated inactivity and indifference,” it said.

The association said its conclusions were based exclusively on prices from the 49 supermarkets participating in the e-kalathi platform and on analysis of data recorded through the free private Smart kalathi application.

It concluded that the authority responsible for consumer protection had once again fallen short of what consumers expected.

“The authority responsible for consumer protection has, unfortunately, once again proved unequal to the circumstances and to consumers’ expectations,” the association said.