Despite a decline in overall inflation in Luxembourg since the beginning of the year, the ULC highlights that food prices have continued to surge relentlessly since October 2021. According to recent data from the National Institute of Statistics and Economic Studies (STATEC), prices have risen by 11.4% within a year.
In a similar context, the French consumer organisation Familles rurales revealed in its recent price observatory that fruit and vegetable prices in France had soared by 16% between June 2022 and June 2023.
“The fact that Luxembourg consumers had to pay the highest food prices in the EU last year is definitely not good publicity for our country,” says Nico Hoffmann, President of the ULC.
The Consumer Protection Association asserts that the effect of wage indexations and tax credits is being nullified, leading them to urgently call on the future government to promptly align the tax table with inflation and consider reintroducing the Office des Prix* or stepping up price controls.
The ULC proposes that the government request price reductions for food products, akin to measures implemented in France. In response to government pressure, 75 major food companies in France are expected to cut prices on hundreds of products, with 39 companies having already complied with Economy Minister Bruno Le Maire’s request.
According to the ULC, implementing such measures in Luxembourg would be more beneficial to consumers than the temporary reduction in VAT introduced on 1 January. Food products are excluded from this VAT reduction, which the ULC had previously questioned in terms of effectiveness.
STATEC’s recent confirmation of the limited impact of the costly VAT reduction, amounting to €317 million, on inflation aligns with the ULC’s concerns. Consumers have felt minimal relief from this measure, further exacerbating the issue of loss of purchasing power, the ULC criticises.
*Editor’s note: Consumer prices in Luxembourg were historically regulated by the ‘Office des Prix’ (‘Prices Office’) from 1944 to 2004 when new principles replaced the previous regulations. Until 2004, Luxembourg was the last European country to adhere to this practice in its legislation.
