Informal extension of Household Basket?

The “Household Basket” measure, an institution that was strongly contested mainly by the market but which was ultimately the previous government’s main tool to combat inflation in grocery items, has now been in effect for 35 weeks.

Whether this will also be its last week, based on what is provided by the existing legislation, which specifies June 30 as the last day of validity of the measure, remains to be seen.

However, Kathimerini understands this issue was discussed on Wednesday at a meeting held by Development Minister Kostas Skrekas with the deputy ministers and general secretaries of the ministry. During the meeting, the data from the implementation of the measure were presented in order to be taken into account for the final decisions regarding the Basket’s future. One of the possible scenarios is the informal extension of the measure beyond July 4, considering that inflation in food is continuing, with the prime minister himself making reference to this problem during his introductory presentation at the first meeting of the new cabinet.

A high-ranking official of a leading supermarket chain told Kathimerini that if the ministry requested an informal extension of the measure, his chain would respond positively. He estimated that the other chains would do the same. It is recalled that the Household Basket measure, as well as the measure imposing a ceiling on profit margins, can only be extended by a new law and not by a simple ministerial decision.

The Basket measure, however, which began on November 2, 2022, was met with strong reactions from the market and especially the branded food industry, as it led to a significant increase in sales of private label products. This is because the supermarket chains, in order to display more competitive Baskets, especially as the previous leadership of the ministry had every week highlighted the chain with the cheapest Basket, put many private label products in it.

Data from market research company Circana (formerly IRI) on the effect of the Basket on market shares showed that the share of private label products rose from 17.8% across product categories in the Basket in January-May 2022 to 19.6% in the same period of 2023.