Food prices are up again despite ‘historical social pact’

The government’s agreement with supermarket owners and food importers, introduced last February to curb the rapid increase in food prices, has had little or no effect on the increasing cost of living in real terms, NSO statistics show.

Malta continued to experience an increase in the cost of living, more than that experienced by its EU counterparts, according to statistics published by the NSO for February. Overall inflation rose 3% when compared to the previous month.

In the rest of the EU, inflation has increased by an average of 2.6%.

Significantly, the increase in food prices continued to be the highest cause of rising inflation in Malta, even during February, despite the government’s direct intervention in the market to try to lower prices.

According to the NSO, “food and non-alcoholic beverages (6.8%) and education (5.6%)” had the highest annual inflation rates in February.

The new statistics show that the government’s direct intervention, through a mechanism Prime Minister Robert Abela described as “a historic social pact”— the terms of which have not been published — did little to improve the situation.

While, through its mechanism, doubtful in terms of EU competition rules, the government said it had reduced the price of some 400 food and beverage products by around 15%, the new NSO statistics show this has had no impact.

According to the government, milk, cereal, pasta, and other daily necessities should have been sold at a lower price starting last month.

Consumers and constituted bodies had described the government’s intervention as a gimmick and another public relations exercise.

Meanwhile, the government has refused to publish the agreement signed with supermarket owners and retailers.

Economy Minister Silvio Schembri has also turned down Freedom of Information requests by The Shift for a copy of the agreement and a list of retailers that joined the government’s scheme.

The new statistics continue to confirm that despite the government pumping hundreds of millions of euro into the economy to subsidise costs such as fuel, wheat, energy, public transport, and other essential items, Malta’s inflation is still increasing at a higher rate than the rest of the EU.