Updated | Abela answers as Malta Chamber presses for collaboration in ongoing inflation issue

Expressing disappointment in the government's unilateral approach to inflation, the Malta Chamber has called for a unified front in addressing inflation.

The Chamber urged the government to reconsider its decision, engage in meaningful discussions within the national forum for social dialogue (MCESD), and seek a more collaborative and sustainable solution to the complex issue of inflation.

As businesses grapple with escalating costs and strive to maintain competitiveness amid changing consumer behaviours, the government is considering direct intervention through price fixing on food to counter inflation. 

However, the Malta Chamber strongly opposes such market interference, arguing that it not only goes against principles but also risks stifling competition to the detriment of all stakeholders.

In a statement on Sunday, the Chamber expressed concerns about fiscal policies that contribute to inflation, combined with a lack of readiness for the impact of EU policies on transportation costs, further intensifying the economic challenges.

The Chamber contends that government interventions, such as price fixing, may appear cosmetic rather than effective.

This approach could lead consumers towards a limited selection of government-designated food items, potentially disregarding superior quality and nutritional value available in the market. 

The Chamber asserts that the chosen strategy is regressive, reminiscent of outdated consumer protection measures that compromise consumer choice and stifle market competition.

“The approach chosen by Government to try to control inflation of food prices is regressive and reminiscent of decades ago when consumer protection came at the expense of consumer choice, and Government controlled the market instead of promoting competition through proper monitoring and regulation, and instead of allowing the market to develop and operators to openly compete according to consumer preferences,” the Chamber said.

Highlighting the ineffectiveness of price fixing as a solution to the complex issue of inflation, the Malta Chamber argues that it fails to address the root causes contributing to rising costs. 

The Chamber emphasised the global factors affecting food prices, such as increased energy costs and disruptions in the supply chain due to geopolitical events and climate change.

Instead of resorting to direct intervention, the Chamber suggested a collaborative approach involving all stakeholders. 

Acknowledging the small but competitive local market, the Chamber encouraged active engagement between the government, businesses, and the Malta Competition and Consumer Affairs Authority (MCCAA) to address market-related issues transparently and effectively.

Inflation falling for many items, but food appears to be an exception - Prime Minister

Addressing the subject later on Sunday, Prime Minister Robert Abeta said inflation seems to be falling on several items but not food.

He said the Cabinet last week discussed further measures to help the people cope with the cost of living. 

"While price inflation is decreasing for many items food prices appear to be an exception," Abela said.

Abela assured that the government will not be giving up on inflation anytime soon and ensured better stability.

He announced that efforts to address this issue will be announced, in line with the people's pleas, in the coming days and weeks.