‘Historic’: Prices of 400 food items to be reduced from 1st February 2024

Leading importers and retailers on Thursday (today) signed a “historic” agreement with Government to reduce the recommended retail price of over 400 essential products across 15 food categories.

The agreement will see the price of these products remain stable until the next Government Budget is announced in late October.

The reduction on the selected items is of 15 per cent over their prices in October 2023. Participating stores will have signs indicating the price difference.

Minister for Economy Silvio Schembri, representing the Government in the agreement, hailed the signing of the agreement as “a historic day”.

“Until the next Budget, the weekly increase in food prices will not continue,” he said. Beyond that date, he continued, Eurostat forecasts that food inflation will drop from current level of 6.4 per cent to 2.4 per cent – a far more manageable level.

Addressing representatives of the participating importers and retailers present, Minister Schembri admitted that “legally, we cannot do anything to control prices,” but stressed that the agreement is not a price control mechanism, but rather “another instance of open and frank dialogue between the Government and importers and retailers.”

He told the assembled representatives: “You will be reducing part of your profits to support broader society.”

In response to some controversy in leading months as importers and retailers were accused of profiteering, the Minister stated that “there was no profiteering or abuse. Business makes a decent profit – it’s their obligation to do so. But we all understood that, as a form of corporate social responsibility, it was time for these companies to stand up and give something back.”

The next steps are now to expand the initiative to smaller retailers and corner shops, which should have on Thursday (today) received a letter explaining how they can take part.

Shops with annual turnover under €800,000 will be eligible for a grant of €125 per month, in recognition of the economies of scale challenges they face.

The importers signing on to the agreement are 360 Foods, Alfsons, Alf Mizzi and Sons Marketing (AMSM), Attard & Co, Carmelo Abela Marketing, Consolidated Biscuit, M&Z, Nectar, Quality Foods, Smina and Valhmor.

The retailers taking part, as at the date of launch, are Arkadia (Mizzi Organisation), Daves, Greens, Lidl, Lighthouse Food Store, Maypole, Mġarr Farms, Miracle Foods, PG Group, Savemart, Scotts, SPAR (Malta Retailer), Smart, Convenience Shop, Ta’ Dirjanu, Welbees and Wolt Market.

Prime Minister’s statement

Taking the podium earlier during the press conference, Prime Minister Robert Abela said the measure was spurred by public discontent by “people who were not understanding how food prices kept increasing despite the efforts made by Government to control inflation.”

He said that he spoke against abuse by dominant market players at various times but acknowledged challenges faced by importers, such as Malta’s small market size and space limitations.

The Prime Minister touched on Government assistance in subsidising the price of energy and fuel, as well as grain, and noted that the tax burden had never been increased.

He admitted that “discussions were not easy” but praised the importers and retailers involved for being “genuine interlocutors” who understood the need for the “unprecedented intervention”, describing the move as “a showcase of corporate social responsibility”.

The scheme is meant to provide a boost to families’ disposable income, and was crafted despite protestations of market and legal limitations.

“Everyone said it’s not possible,” said Dr Abela. “But we will together be providing a stability that many families did not believe was possible.”

The Prime Minister also thanked Minister Schembri for “always believing” in the vision: “He was the only one who never said it was impossible.”