19 April 2024

Italy struggling to broker deal to control prices of essential goods

2 min read

Italy is likely to scale back its anti-inflation plans as producers are refusing to submit to a deal with supermarket chains to control prices of consumer staples, two people familiar with the talks said on Thursday. Annual inflation slowed to 6.4% in July from 6.7% in June, EU-harmonised consumer price data showed, but prices of food, and household and personal care goods rose 10.4%, slightly less than the month before but still over 50% more than the overall index.

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To help the poor, the government has been trying to negotiate an agreement between producers and retailers to cap prices of food and other essentials from October to December. Participating retail stores would be marked with government stickers in the green, white and red of the Italian flag with “anti-inflation quarter” written on it, a reference to the last three months of the year.

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The accord was supposed to deliver a “decisive blow” to inflation, Industry Minister Adolfo Urso said on Monday, but the people said at present there were no conditions to go ahead with the signing. Without the backing of industries, supermarkets do not intend to endorse the plan, they added.

The government is now discussing a joint declaration with supermarkets and shopkeepers’ associations envisaging an agreement to be announced by Sept. 10 to keep prices down in the fourth quarter. Seen by Reuters, the draft statement admits that the industry associations have so far not been willing to sign off on any deal.

The industry ministry did not respond to a request for a comment. Persistently high inflation is posing a major headache for nationalist Prime Minister Giorgia Meloni, who is also facing mounting discontent over cuts her government imposed to a poverty relief scheme that is affecting hundreds of thousands of people.

(This story has not been edited by staff and is auto-generated from a syndicated feed.)