The relentless increase in prices and… manipulation!

Author: Ernilda Luzi

While inflation in food prices is a phenomenon that has affected the entire globe due to recent crises, Albania, unlike many EU countries, lacks tools to assist basic staple product producers, to alleviate the financial burden on consumers, nor institutions to monitor the possibility of price abuse by different operators. Albania, despite being one of the lowest-income countries per person in Europe, ranks for many grocery products, as one of the countries with the highest level of prices, leaving behind even some EU countries.

The relentless increase in grocery prices is becoming an unbearable burden for most citizens. In the food market near the Ballet School, you see citizens touching the products, shuffling them, and then leaving them back on the sellers’ stalls. One of the citizens begins to complain:

“We can’t afford these prices, the wages are very low. With these prices we have, it means we are constantly stressed about life. We can’t manage with our income, we pay for food, we pay for the internet, we pay for electricity, water, phone, but we can’t even think about getting sick because we are afraid, and when we do get sick, we can’t afford even the cheapest medicines.”

At the same time, an elderly lady, frail and barely able to walk, passed by with a cane, her hands trembling as she opened a bag filled with medications. “I am retired, and the pension is very small. I have a bag of medicines; the pension is only enough for medications.”

The increase in prices has not only affected the elderly but also the youth, leaving a significant portion without an escape route, as emigration becomes an option to escape the country.

“With these prices, not only can we not save, but we struggle to make it through the month. The only solution, the only glimmer of hope I see, is to leave as soon as I obtain my diploma because there is no future here. We have no support, nothing from the government,” says a student.

The prices of products are rising with astronomical figures.

Citizens are consuming less compared to two years ago, or at least that’s what the sellers in the fruit and vegetable markets in Tirana say. The reason behind this is the increase in prices. Reports from the Institute of Statistics show a significant increase in grocery prices, with almost all categories of food products seeing an increase compared to previous years. However, basic products such as sugar, salt, honey, oils and fats, as well as bread and cereals, have experienced much higher price hikes, with respective increases of 11.4%, 24%, and 115.8% compared to a year ago.

INSTAT has further observed an increase in prices during the first months of 2023 compared to May 2022. The largest price increase was noticed in the “Food and non-alcoholic beverages” group with 10.0%, followed by the groups of “Recreation and culture” with 6.9%, “Furniture, household goods, and home maintenance” with 6.5%, “Hotels, cafes, and restaurants” with 5.0%, “Clothing and footwear” with 4.2%, “Goods and various services” with 4.0%, “Alcoholic beverages and tobacco” with 3.7%, “Rent, water, fuel, and energy” and “Education services” with 2.2% each, “Health” with 1.4%, and “Communication” with 1.2%.

This increase in prices has also led to a decline in product consumption, as noticed by the traders.

“Purchasing has declined; people have left, and only the elderly remain. However, the increase in prices has also had an impact. Compared to the period before the quarantine, it has dropped significantly,” says a vendor at one of the stalls on Elbasan Road.

Economic expert Teuta Nunaj Kortoçi explains that the increase in prices is a result of two factors. The external factor: “The COVID crisis created supply problems, and at the same time, the Russia-Ukraine conflict exacerbated the effects of the initial crisis.”

“For livestock products, the increase in prices is related to the decrease in farms due to emigration. This has had effects on several sectors and in various forms, meaning that there is less production, which will increase costs,” explains the economic expert.

Eurostat has published a survey report on the consumer price index for the year 2022, where Albania was listed with higher prices for a category of products compared to some EU countries. In 2022, Albania ranked among the European countries with the highest prices for fruits and eggs, with the prices of the latter being around 111.7% of the EU average. In other words, if 1 kilogram of these products cost an average of 100 lek in EU countries, it would cost around 111.7 lek in Albania in 2022.

The increase in the price of secondary products raises the cost of food production. Insufficient subsidies exacerbate the situation.

We hear from Kasem, a farmer from the village of Dushk in Lushnja, who raises the issue that with the situation of rising prices, earning profits from agricultural product trading has become even more challenging.

“We spend more than we earn from selling agricultural products,” he says, indicating that production costs have also increased multiple times.

“The production cost has increased because fertilizer alone costs 130,000 lek per quintal. Just the wheat seeds alone cost 100,000 lek, while the cost is much higher for other products such as barley. This year, the price of barley is 120 lek per kilogram. Even feed crops like alfalfa, which we need for livestock, have become expensive,” he says.

The problem that farmers are encountering remains finding buyers and selling their products at a low price to traders.

“We suffer losses in production because it is very difficult to find a buyer. Traders purchase from us at low prices and then sell the products at high prices. It takes a lot of time for us to find a buyer, and if one is not found, we have to feed the wheat to the poultry,” says Kasem.

Support for producers to curb inflation is missing

According to the economic expert Teuta Nunaj Kortoci, “Farmers need support to reduce the costs of production. By reducing costs, they can increase the quantity of production and, at the same time, produce more.”

According to her, “Generally, traders benefit more than the farmer who produces the product, so the profit margin for the farmer is smaller than that of the trader. This causes dissatisfaction for the latter, and due to low income, he chooses to abandon the land and migrate. In this case, the state can intervene as a regulator, to protect the farmer and prevent price abuses.”

In response to an information request submitted by ACQJ to the Ministry of Agriculture, the ministry stated that the measures taken for farmers in 2022 include a total budget of 5.1 billion lekë for the national support scheme, with the allocated fund for the fuel support measure for mechanized agricultural work in 2022 amounting to 1.95 billion lekë.

The Executive Director of the Association of Dairy Processing Industry, Donjaldo Hoxha, states that the fund provided by the Ministry of Agriculture is insufficient.

“In 2022, around 7,200 farmers applied, but only 6,000 of them managed to receive the subsidy. So, despite the limited number of beneficiaries and the relatively small amount of the subsidy, it is still insufficient compared to the demand of the Albanian livestock sector,” he says.

“In terms of the subsidy scheme or support provided by the government to livestock farmers in each country, it is significantly lower in Albania compared to the support received by livestock farmers in the region. If we compare it with one of the neighboring countries, they have a production-based scheme, which means that for every liter of milk produced by livestock farmers in the region (Kosovo, North Macedonia, Serbia), they are subsidized by their respective government,” said Mr. Hoxha.

He further explains to ACQJ that the second subsidy scheme is related to support for the heads of livestock. This scheme, in terms of comparison, is the same scheme as the one provided in Albania, but with a significantly different aspect: there is no upper limit. This means that if a farm has 300 heads of livestock, the subsidy is 25 euros per head, so for different quantities of livestock, you receive varying levels of support and subsidy.

“This does not happen in Albania; there is an upper limit, and everyone above that limit receives the same amount, regardless of the number of heads of livestock they have. The support for heads of livestock in the region is 25 euros, while in our country, it is 1200 ALL or 10 euros.”

Mr. Hoxha says that there has been a decline in the number of livestock, especially dairy cows, in our country due to the fact that their breeding has not been beneficial and profitable for farmers and livestock breeders.

Simultaneously with the lack of appropriate subsidies, which lead to the price of fresh milk from farmers being 35%-40% higher than in the region and the EU, Hoxha states that the price of the final product is also negatively impacted by high prices of oil, electricity, gas, packaging materials, industry employee wages, etc., which result in non-competitive prices and suffocation of the domestic market by imported products.

ACQJ approached several major producers in the dairy market in Albania to obtain a comment on the increase in the cost of raw materials for their products and how this has impacted the prices of end products such as milk, cheese, butter, or other dairy products in supermarket shelves. However, until the time of publication, all the companies refused to comment.

Increase in prices but also abuse by vendors

Despite the increase in primary and auxiliary products for farmers, which has naturally led to an increase in product prices on supermarket shelves, experts also indicate cases of price abuses in the market.

The Head of the National Center for Consumer Protection, Hasan Stafa, highlights the issue of price abuse, which has been observed recently, resulting in an increase in consumer complaints directed to the organization.

“There have been at least 724 reported complaints in the last two months, and very few measures have been considered by the authorities. The consumer remains completely unprotected. Abusive prices, theft, and deception continue in almost all food products,” he says.

He says that his center has reported the abuse, but no government institution has intervened.

“If the price of cheese has gone from 450 to 1200 lekë today, which is an increase of about 82% within a month, without any justification because the price in the global and regional market has fallen… When there are no mechanisms to stop this kind of abuse, consumers are left at the mercy of fate,” he says.

ACQJ, based on the significant increase in food prices and the stance of experts in the field on this issue, conducted an assessment of the market for these products, where it was observed that unlike neighboring countries and even EU countries, the prices of many products were at very high levels.

Teuta Nunaj Kortoçi, an expert in economics, says that “prices are high in the market compared to wages.”

She explains that generally when prices have increased in the past, it has been very difficult for them to decrease, so cases of price reductions are rare.

Looking at the inflation rate in 2022 and the first quarter of 2023, Ms. Kortoçi does not predict a decrease in grocery prices in the coming months or in the first months of 2024.

State institutions and their role

One of the measures taken by the government to manage the situation of price increases was the establishment of the Transparency and Monitoring Board for Wholesale/Retail Prices of essential food products. This board was established in accordance with the normative act no. 7, dated March 18, 2022, titled “On transparency and monitoring of prices for certain basic food products and related products, as a result of the special situation created in the market.”

Through a request for information, ACQJ asked the Ministry of Finance about the functioning and purpose of the Transparency Board. The Ministry assessed that the decision to establish the Transparency Board was necessary given the situation at hand.

“In the conditions of an uncertain situation, not only for our country but for many countries in Europe, in order to prevent panic among consumers, a goal that was achieved, the government intervention aimed at ensuring the supply of the population with essential food products and maintaining prices within normal trading limits, without disrupting the economic operators’ activities and considering normal gross trading margins,” stated the Ministry in its response.

Meanwhile, this Board conducted three meetings, where it approved the margins to be applied for some essential food products. However, it has now been abolished through a decision of the Constitutional Court as an institution with activities incompatible with the Constitution of the Republic of Albania.

Experts express that the Board did not fulfill its function in any case. According to the economist Teuta Nunaj Kortoçi, the Transparency Board should have been closed a long time ago.

“This intervention did not yield the expected results because, in the case of the increase in flour prices, we have the situation where the four largest companies in flour and bread production in the country were fined by public institutions for price abuse, thus violating competition rules,” she said.

In a request initially addressed to the Consumer Protection Authority, ACQJ sought information on how this authority guarantees the rights of citizens by combating price abuse of consumer products. However, the authority declared its incompetence on this issue and delegated responsibility to the Market Administration Agency under the Municipality of Tirana, as well as the National Food Authority.

After receiving a response from the CPA, we approached the National Food Authority and the Market Administration Agency, but both institutions emphasized that they do not have the competence to combat the price abuse of food products.

The prices of basic food items continue to rise year after year, just like the prices of agricultural products for farmers and livestock breeders. However, in a market where price speculation and abuse of these products have not been absent, the responsibility for consumer protection has been left in limbo.


This article is part of the project Investigative Journalism Lab that is financially supported by the Public Relations Office of the US Embassy in Tirana. The opinions, findings, conclusions, and recommendations expressed are those of the author(s) and do not necessarily represent those of the Department of State.
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