The draft law on price restrictions is incomplete

The draft law on temporary measures to limit the prices of products of special importance for people's life and health does not indicate the situations when "temporary" measures can be introduced, what measures could be introduced, to what extent and for what period, as well as the product framework to which they can apply.

This was assessed by the Union of Employers (UPCG), which participated in the public debate regarding this draft law, the application of which, as previously assessed by the Ministry of Economic Development (MER), would determine temporary measures to prevent disruptions in the market and eliminate the negative effects of product price increases.

The measures would last as long as the circumstances that caused the market disruption and price increase last, and would be reviewed at least once every three months.

The UPCG told "Vijesti" that, bearing in mind the goal of the draft law, the possibility of introducing (temporarily) zero taxation for some types of basic foodstuffs should also be considered.

"We believe that it would be a more adequate and acceptable solution for the economy, and it would also have a good effect on consumers, that is, citizens," said UPCG.

From this organization, they said that they recognized the good intention of the Government aimed at the general benefit, in order to prevent disturbances on the market by introducing temporary measures and eliminate the negative effects of the price increase of this product.

However, as they stated, the work on this law was accelerated by global events, so due to the war in Ukraine and inflation throughout Europe, the prices of raw materials and energy are rising, and a decline in production and consumption can hardly be avoided.

Experience from the region without results

"That is why it seems useful to state that the comparative practice and analysis of similar measures undertaken in, for example, neighboring countries indicate effects that did not bring the expected results. Namely, the surveyed citizens stated that they did not feel any significant reduction in prices, while businessmen from the ranks of entrepreneurs and micro and small businesses indicated that their business was additionally threatened by large trade chains that purchase on more favorable terms due to the quantities they procure," said the UPCG.

They added that the experience of producers of basic foodstuffs indicates that such measures have put them in a disadvantageous position due to the growth of accompanying costs - production inputs, that is, the prices of accompanying (necessary) products and services.

UPCG believes that the planned measures to limit prices should be approached very studiously, with a prior analysis of all the positive and negative effects of such measures.

"This is due to the fact that Montenegro is characterized by high import dependence and it will be a big challenge to provide the necessary quantities of certain products (especially energy and basic foodstuffs), while purchasing prices are difficult to project", said UPCG.

Their suggestion was that it might have been more correct and simpler to amend the law on internal trade, considering that this draft law creates a legal basis for the adoption of by-laws and concrete measures for market regulation when certain events and situations require it.

MER told "Vijesta" that the proposal created a legal basis for limiting the prices of products important to people's lives and health, in cases of serious inflationary risks, and that the list of products to which the law applies will be established by a by-law, with the obligation to review the decision every three months.

"These are temporary price limiting measures that can only be determined to eliminate the negative effects of the increase in the prices of basic foodstuffs. The Ministry has developed a special methodology for monitoring the prices of basic foodstuffs, on a monthly basis, which is based on the data we receive from the Directorate for Inspection Affairs (market inspections), which are collected from the field. In this way, we have information on prices and margins for 21 basic food items", explained the MER.

Which products will be on the list, as they say, depends on the Government's assessment at the given moment, as well as that the draft law implies the determination of the maximum retail price for a certain product, which will be valid on the territory of Montenegro for all retail chains. The message will be given by the Government when limiting prices to take into account the purchase price of the product and the retail margin so that the retail chains would not be at a loss.

They judged that there is no need to organize a round table on the draft law

The public hearing on the proposal ended on Thursday without a round table.

MER says that the public discussion was carried out in accordance with the plan, while organizing a round table in connection with the draft of a specific regulation is not a mandatory segment of the public discussion, but may or may not be held.

"Given that on the day of the publication of the public hearing (February 18), the entire public was informed through the media about the publication of the draft law, we felt that it was not necessary to organize a round table on this topic.

After being approved at the Government session, the Law will be referred to the parliamentary procedure on an urgent basis, i.e. abbreviated procedure.