Lejla Cavcic | Europe and Eurasia Fellow
Image sourced from Nathalia Rosa via Unsplash.
A supermarket boycott movement, started in Croatia, has spread across the Balkans, with Bosnia and Herzegovina, Montenegro, North Macedonia, Slovenia, Albania, Kosovo and Serbia following suit. The movement followed a massive increase in food prices and the cost of living in the last six months. Many retailers have been accused of price fixing or corporate profiteering, despite inflation set to ease. This has resulted in an increase in food prices, affecting both consumers as well as local producers. As some boycotts continue, governments across the Balkans have introduced price caps on staple items. However, implementing short-term price freezes would be a more effective approach to ensure stability and prevent exploitative pricing.
Inflation or greedflation?
As a result of the Russia-Ukraine war, inflation surged at a high not seen since Yugoslavia’s collapse in the 1990s. Consequently, food prices have continued to grow beyond 2022. Despite inflation easing, its effect on prices is largely entrenched and has remained at an all-time high, and retailers therefore often blamed for price fixing or “greedflation”. Regardless, it is affecting the poorest households most, who spend higher proportions of their income on energy and food. World Bank economists suggest the increase in cost of living for those groups is much higher than what is suggested by inflation figures. Over the past six months, food prices have risen sharply, putting these groups at even greater risk.
Power of the people: Hello, Inspector!
In the lead-up to the boycotts, prices of basic food items in Croatia, such as bread and eggs had increased up to 60 per cent. Whilst higher prices may be expected in Croatia than in neighbouring countries, due to its European Union (EU) membership, the prices in many cases were significantly higher than in Western European countries, such as Germany. A German shampoo, for example, sold in Croatia, costs 3.35 euros, 130 per cent more than what it costs in Germany.
Consumer dissatisfaction led to rights platform ‘Halo, Inspektore!’ (‘Hello, Inspector!’) launching a campaign urging shoppers to boycott stores. The first boycott on 24 January, was the most effective, leading to a 44 per cent drop in transactions, and a 53 per cent decrease in sales value. Similar results, albeit not as powerful, were brought on 31 January and 7 February boycotts. The group’s founder declared to “do it all again”, announcing subsequent rounds of the boycotts, calling on consumers to boycott “everything” – not just supermarkets, but retail chains, bakeries, pharmacies, cafes, restaurants and more.
With support from consumer protection groups, NGOs, trade unions, politicians and ministers, the boycotts were en route to effecting change. The effort ultimately led Croatia’s government to cap the prices of 70 food items, such as flour, milk, bread, juice, and hygiene products.
Boycotts quickly spread amongst the region, including to those in non-EU member states. For example, organisers in Bosnia and Herzegovina found that implementing boycotts on specific days was more successful than multi-day boycotts, with organiser Bojkot.ba advocating for boycotts every Friday. Much like Croatia, the prices of 50 products were capped, suggesting a “50+20 items” list to ensure those most vulnerable could afford essentials. However, price freezes would be even more effective in maintaining affordability and preventing sudden cost increases, thereby ensuring that low-income households are not exploited by profiteering.
Food security: agriculture an essential source of employment
While the productivity of Western Balkans’ agriculture lags behind the EU, it remains a major source of income in the region, especially for those in rural areas. Unfortunately, price caps on produce mean that local farmers cannot compete with big supermarket chains due to the availability of cheaper imports. This pressures local farmers to accept lower wholesale prices. Conversely, if they fail to lower prices, they risk being unable to compete with cheaper imported goods, forcing them to sell at unprofitable prices.
In 2022, Hungary imposed similar price caps on essential food items, resulting in supermarkets unable to maintain the supplies, and eventually leading to shortages. Retailers then began to source for cheaper imports instead of buying from local farmers. It further resulted in the European Court of Justice issuing a ruling in 2024, finding that the price caps broke EU rules. The Court also found that the legislation “undermined fair competition” and was not in line with the stated objective of “combating inflation and protecting disadvantaged consumers”.
Short-term price freezes: a better option
To counteract this, price freezes on essential items is an effective solution. For example, France recently implemented a price freeze on 5,000 food products. Unlike a price cap, which can fluctuate, price freezes are completely fixed and are best applied in the short term, which is currently better for the Balkans. This means that supermarkets will not be able to manipulate prices. Locking in prices within existing supply chains with local producers will reduce the chances of retailers turning to cheaper imports, and in turn ensure that those most vulnerable can afford basic food items. Solutions could also include policies to subsidise local producers, or incentives for supermarkets that prioritise deals with local farmers.
Governments across the region must open dialogue among producers, distributors, and supermarket chains to determine why there has been a drastic rise in prices in the last six months and identify solutions to bring costs down. Ultimately, placing price freezes on essential items is the most effective approach to ensure that those most vulnerable can afford basic food items.
Lejla Cavcic is the Europe and Eurasia Fellow for Young Australians in International Affairs. Lejla holds a Bachelor of Laws and Bachelor of Arts from the University of Adelaide, majoring in Politics and International Relations. Her passion for Europe and Eurasia is influenced by her Bosnian heritage. She is fluent in Bosnian, having earned two Awards of Excellence in the language during her senior school years. As the Europe and Eurasia Fellow, Lejla is excited to leverage her knowledge to contribute to discussions on international affairs, human rights, and their implications for the region.
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