Asked to present a point of view regarding the Ordinance that aims to limit prices for certain food products, the Competition Council has transmitted its analysis to the Government, warning about the risks contained in this measure. Specifically, it states:

"From the analysis of the Draft Government Ordinance, we can highlight a series of risks, particularly concerning the aspects listed below, clarification of which could contribute to achieving the ultimate goal of the project, namely reducing the prices of food products:

• The lack of similar provisions regarding the applicability of restrictions on products imported from legal entities that are not registered in Romania (for products processed outside the national territory);
• The method of implementing the cumulative commercial margin throughout the distribution chain, of maximum 5%, may be difficult to implement since the actors at this level do not have access to sensitive information regarding the margins applied by their competitors; a possible consequence of this provision could be excessive transparency of the market, especially regarding the most sensitive characteristics such as price, cost, and commercial margin, which could amplify the negative effects on the market;
• The lack of concrete specifications regarding the manner or method of determining the production cost, with direct effects on the implementation of legislative measures. Setting a level of margin, even if maximum, that is not considered optimal by suppliers, may generate difficulties in supplying the domestic market and have a counterproductive effect on the intended purpose;
• The lack of sector-specific analyses confirming that the maximum margin limit is appropriate and will not lead to a counter effect, such as an increase in the prices of the products in question or other products in the same category, through a compensatory effect.

In this situation, the Competition Council would have considered it useful to conduct an ex-ante impact assessment that would highlight to what extent the implementation of the Draft Government Ordinance will contribute to the anticipated decrease in prices.

However, considering the time constraints, the Competition Council considers it appropriate to conduct an ex-post analysis to evaluate the results and proportionality with the intended purpose of the measure, as well as to identify, if necessary, alternative solutions.

• Additionally, the maximum margin of 20% on the production cost, in the case of processors, and maximum 5% and 20% on the purchase price, in the case of distributors and retailers, respectively, also entails risks in the sense that it may lead to operators aligning with the maximum threshold and result in price increases for end consumers.", warns the Competition Council.