VAT hike – how the main markets respond

Companies rushed to raise their prices on the markets with
little competition, thus limiting chances of a rebound in consumer
spending.

The major petroleum companies, cigarette producers, as well as
mobile telephony operators – markets that see 13 billion euros in
annual turnover, incorporated the VAT increase from 19% to 24% into
their end prices, unwilling to lower their margins, although
consumer spending on these markets has been going down for more
than 18 months.
Whereas on the less competitive markets, where three or four
companies control over 90% of sales, the price hikes were operated
simultaneously and in some cases exceeded the VAT raise percentage,
things were somewhat different in construction or food retail,
because, as entrepreneurs say “we make money from individuals, who
have to keep buying.”
Companies that decided to bear at least part of the VAT hike
say they are doing it only to keep their clients, already affected
by austerity measures, and their decisions have not been made to
“help the Government”, which takes all these steps unilaterally,
without consulting or involving the business sector in the
process.