Watch: Leading Maltese Economist Warns Food Price Reduction Scheme Is ‘Dangerous’
Leading Maltese economist and professor Lino Briguglio warned that the ongoing Stabbiltà government scheme to reduce prices of certain food items is “dangerous”.
Addressing a major PN event yesterday, Briguglio compared this scheme to the situation Malta was in back in the 1970s, when ministers would use the Budget speech to announce price reductions of food items.
“The strategy was to select food items that carry a great weight in price indexes and individuate them just as ministers had done in the 70s, so as to give the impression that prices and price indexes have gone down.”
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“Meanwhile, prices in Europe have gone down significantly without direct ministerial intervention, but in Malta the minister will take credit for prices going down.”
Prime Minister Robert Abela has already credited the Stabbiltà food reduction scheme, which reduces the recommended retail price (RRP) of 15 basic food items by 15%, for kicking off a price war among supermarkets.
Briguglio went on to point out that the Competition Authority exists to take action against cartels and unfair pricing strategies and was set up specifically to stop politicians from interfering in prices.
“The minister (Silvio Schembri) ignored this law entirely and placed everyone in the same basket as though every business owner is a thief,” he said. “I think there are some are thieves out there but not everyone, as this intervention implied.”
“We cannot say that supermarkets reduced prices voluntarily but I think there was political pressure. Without anything being said, there could have been some secret punishments – it wouldn’t be visible but it would happen sometimes when someone doesn’t follow the desired line.”
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