-The government and representatives of food supply businesses set up a joint board to set a price cap on basic food items.

The most recently launched Social Resistance Package in the face of rising commodity prices is also designed to counter the soaring prices of basic food items by providing cash handouts to retirees according to determined categories, families under the social welfare benefit scheme and people with disabilities.

Prime Minister Edi Rama today invited representatives of food supply businesses to discuss a joint new approach in a bid to cope with the situation and tackle the war effects on prices in the Albanian market.

In its efforts to deal with the situation, the government will immediately intervene to provide transparency on basic food prices and freeze profit margins.

The Premier announced the decision on establishment of a joint board to set price cap on basic food items and the board will comprise government officials and wholesale grocers and representatives from food supply businesses. The government head stated that the board will set a price cap on food items and no food businesses will be tolerated if setting prices other than the ones imposed by the board.

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Hello everyone!

Together with the Minister of Finance and Economy, and the Minister of Agriculture and Rural Development, we have held an intense volume of communication with both retail and wholesale food products suppliers and today is the right time to share with you here at the Prime Minister’s office the public communication on what should be the line of conduct during this so dramatic moment, a line of conduct that is required because of the indispensability for a different approach from a normal time approach.

You know quite well I am not one of those who rely on the market interventions, but this is actually the case during a normal time and this is also the case with the organic crisis happening at normal times, such as the global organic inflation crisis, which affected our country too by causing a slight yet significant price hike.

However, we are not going through such conditions now. We face completely different conditions today as the crisis is no longer an organic one. The most recent crisis is triggered by the military aggression of a big economic power and a top supplier of raw materials, namely Russia’s aggression on Ukraine, as well as a number of developments in the context of this war that are constantly disrupting and destabilizing the market, a disruption to which you are firsthand eyewitness during your daily activities as you look at the markets on daily basis as part of your activity.

Now, I want to assure each and every one of you that we really know the difficulties you are going through amid this situation, where finding new markets is the main difficulty that may worsen further, but now it is time to forget about profits.

Now it is time for you all to employ all the capacities as part of the efforts to cope with this huge challenge we didn’t choose, but it picked us, and support those most in need. There are several items as part of the basic food items group and the most important is the cooking oil and its price has soared, certainly for a good reason. However, we still believe there is enough room to manoeuvre and act by setting a lower price on the cooking oil.

I know you are encountering troubles in securing and procuring new supplies of this food item. I know this is becoming a serious problem everywhere and not in Albania only, because as the ministers have been communicating with you over all these days, I have been engaged in my communications to gain access to new supply routes, where big powers also find it tough in their efforts to secure sufficient quantity medium term supplies based on the consumption data, and therefore it can’t be otherwise here. However, there is room to intervene at this moment.

I believe our experts were right as they think this early alarming moment was inevitable, but we can no longer afford pretending as if nothing has happened. No profitable experiment can be done from now on with the idea that people continue buying food items. It is quite significant to us and everyone should know that consumption has declined significantly. It is a significant increase, which shows a completely different thing from the unrestrained propaganda of an alleged extreme poverty, but that does not mean at all that the situation is as such allowing you to keep such higher prices. Prices may rise again in the future.

A day ago I had a communication via Zoom with other people abroad and, among many other things, a prediction based on some arguments, although not 100% accurate, suggests that the world may face the worst shock in terms of fuel supplies during the second and third quarter of this year, as a result of exclusion and the shortage of a huge quantity of Russian fuel from the market.

So, anything can happen and nothing is ruled out. Many predict that the world can be gripped by a new oil crisis like the oil price shock that hit the world in 1974, and none of us here have any idea what has actually happened in 1974, when the fuel prices increased beyond any imaginable benchmark because of OPEC and the fuel supply issues. These are all possible scenarios. Nobody can predict the future, because no one knows how long the war would last. However, we all share a common obligation as Albanians for everyone to do their share, but this is not what a retiree can do as he or she needs basic food items and lacks any potential means to replace them with anything else or hasn’t accumulated sufficient savings to face the market prices. It is the government that will provide support to this category and the government will provide a cash handout equal to the increase in the price of basic food items. However, you will also support them by setting acceptable prices.

What worries me most is a report I have received from the Minister of Finance, who is here and can affirm it herself, is the fact that the majority blames the minority and vice-versa when it comes to the price hike. In order to prevent this blame-throwing between each other, we will intervene and together we will establish a joint board to set price caps of basic food items and the joint board will include both government officials and representatives of retail and wholesale food suppliers. Prices of the basic food items will be determined by this board and nobody will be tolerated if setting higher prices than the ones decided by the board and whoever sets higher prices will see their licences removed and the supplies will be totally confiscated by law. The government will approve a normative act and entire supplies will be confiscated if anyone dares to speculate and set higher prices than the ones set by the board. Just like we are doing with the fuel prices, the goal is not to set arbitrary prices, because everyone certainly wants lower prices. However, we can’t set price caps as we please. We really wish to cut prices to the pre-crisis levels, but we can’t do so, and this is not our goal, but together we will provide transparency over the food items. I don’t support the claims alleging that you have purchased the current supplies three months ago and therefore these food items should be sold at the previous prices. I don’t support it, because this is not the way the economy works, especially amid the war conditions. If it was to be the case, how are you supposed to purchase more supplies and import them?

 Nobody will be allowed to speculate and generate undeserved profits based on price hikes amid this scandalous time and definitely nobody has the right to ask you to accept losses, because if you were to do so you won’t be able to provide your services in the future and this could turn out to be a horrible situation. But we desperately need you. It is very easy to talk about and comment on the individuals and companies that have built these lines of supplies and structures and it is easy to issue appeals “to cultivate and produce wheat locally to meet domestic demand and mobilize all resources to refine oil locally as the country has been blessed by God with oil reserves and Albanians should receive fuel for free.” Why is oil not provided for free in Saudi Arabia? Why doesn’t fuel cost cheaper in Saudi Arabia when oil prices increase in the international markets? How does it work this way? However, unlike Saudi Arabia and other oil-rich countries that are home to light oil that can be easily refined and transformed into diesel and gasoline, Albania produces crude oil grade, highly viscous and with high sulphur content and if we were to refine it the cost and its price would be extremely high as if we were to sell jet fuel.

This is also the case with the energy which is a story on its own. “We have been blessed with energy resources and we should receive electricity for free,” some claim. This is as if whenever it rains, all the water is transformed into electricity. “We generate electricity locally and we meet the domestic demand, but you sell it as you can steal it this way.” No, we generate a part of the electricity we need to meet the domestic demand and we import a good part of it. During the seasons of abundant rains, which unfortunately hasn’t been the case in the last three years, we can generate more electricity and therefore we import less electricity. But, during the prolonged droughts as it is the case this year with scarce or almost no rainfalls at all, the river cascade is at its record low, we are forced to import electricity, but the current electricity price is 550 euros per megawatt hour from 52 euros during the same period of the previous year. The power price has slightly dropped recently, but still too far from last year’s price levels.

However, we have decided to protect household consumers and small businesses no matter how up the electricity price goes. As such, this is an enormous effort of the government and the state budget and that’s why we have already started to cut spending and we can end up reducing every spending, but such a move would also have its consequences. If we were to suspend all the investment projects this would mean that many people would become jobless and this would stop generating revenue from such investments. Second, this would be translated into another spiral, but I am not going to elaborate on the worst sides of the whole story, because the war doesn’t happen to bring joy, the war doesn’t happen to bring prosperity. The war causes distress and destruction and it costs lives for many civilians and servicemen in the front.

I am saying all these so that everyone does their share. We can’t increase the electricity price for small businesses. It is impossible for us to do so. If we were to impose the real electricity price on small businesses, such a decision would be translated into the loss of one or two job positions. This would mean that as many as 95.000 people would become jobless. Of course, you have a role in the food prices, because when it comes to electricity fortunately the country’s power system has not been totally privatized as it is the case in several other countries and can’t intervene to regulate the electricity prices. The power system is still state-owned and we can do what we are doing with the price, which is something totally anti-capitalist, but this is the right thing to be done today, because it is a war and the power crisis is horrible and I am not going to unveil the projections about possible electricity shortages in the process, as it was the case with the oil.

We are conducting a study to remove households consuming more electricity from this government’s full protection scheme as they live in much better conditions, yet they constitute an insignificant part and it wouldn’t change things a lot, but we are doing so. However, none of the households will see an increase in their electricity bills for the time being. The same goes for small businesses.

We don’t want the cash support of 3000 lek to over half a million of Albanian citizens in the next three months, hoping we won’t be forced to postpone such a decision later, be totally shadowed by the prices of food items you may set and this would be unacceptable.

The point is that we should deal with the situation together, primarily with patriotism, which is a word we like to use when we face no threats and when we want to use abusive language against people of other nationalities when in stadiums, but this is actually the time when everyone should demonstrate their patriotism.

This is also a great opportunity for you to be relieved of any sins you might have committed along your pathway to becoming businessmen and start to cleanse yourselves of sins once the war is over.

Imagine if you were to gain profits on the blood of people who are being killed there and on the tears of people here – and by this I am not referring to those who have launched protests, because if it were for them I would cooperate with you to double the prices – but imagine if you were to generate profits and imagine seeing Saint Peter as you approach the Pearly Gates, with the Saint asking you: “What did you do during your lifetime?” and with you telling Him this and that. He would ask you then: “How come that you generated so many profits during the war in Ukraine?!” This shouldn’t happen because you would then end up in the inferno, the last circle of hell.

And beyond this joke, which is actually the half truth, I would beg for your full understanding, because this is not about the state to make unilateral decisions and impose its will and I am concluding my remarks with the argument I started this meeting by reiterating I oppose any state interventions into the market’s backbone, not because I am ideologically hampered to do so, but this would be scandalous during peacetime, while this would be a must during wartime and that’s why I am together with the Minister here.

The Minister of Agriculture and Rural Development would have been attending this event, but she is undergoing an interpellation session in Parliament as we are in war conditions.

You are people who were not born rich, you did not inherit from your family, you all started from scratch, you all saw difficult days of poverty. It is time for you to recall that part of your life! I would invite you to recall that time and say “here we are again.” The day has come for you to give away more and earn less.

Therefore you should keep only what you need to run your businesses. Without having to resort to restrictive measures that can cause devastation and destruction that is again reflected in the market, because what the war partisans fail to realize with the logic of the capitalist system and the thing that those who appeal on the government to catch, arrest and send them in jail are unable to grasp that this is very nice to watch as a war movie against the bloodsuckers, but it destroys exactly those bridges that connect the market and then you find yourself with nothing at all.

Work is progressing well regarding the fuel and oil prices. I believe we are making transparency over the oil price, we are earning final understanding, despite the fact that the board’s meetings are really tense, but the outcome of the meetings is what matters most. I am looking forward to building the same understanding together, but what is going to happen is that everyone would face extreme measures if they refuse to accept such a line of conduct.

What we are seeking to make sure is that if we set a certain price of the cooking oil and argue the logic behind this price, the price can’t be higher or it can’t differ at various shops. The price would be unique! And whoever would wish to set a higher price he or she would be deprived of the whole existing supply and will be deprived of the business licence. Regular and continued inspection actions will be carried out in every supermarket to check the prices and the consequences every businessman may face if they set higher prices is that the license will be removed and entire supplies will be confiscated. This should be clear to everyone! We would stipulate it by law. I don’t think things would aggravate and boil to this point and I wish it wouldn’t be the case for none of you, because we are asking nothing that it would damage the core of your business. This means we want to guarantee your existence in the future, because it is not easy to make all the contracts, the resources and business channels available. The only thing you should do is to make up your mind that you won’t be able to earn as much as you normally do. The profit margin should be frozen to the point it is sufficient for you to continue operating, without encountering difficulties in paying the same monthly salaries to your workers and keep your daily activities running.

Today’s meeting marks the peak of a week-long process that saw a series of gatherings, discussions, talks and analysis to figure out what is going on and I am very pleased that everything is progressing properly.

It is up to you now to name the persons who will represent food wholesale and retail business in the joint board with the Ministry of Economy and Finance and the first meeting of this new board takes place tomorrow and ‘dot the i’s and cross the t’s’ and then be announced for the public or the majority for them to know the price caps for the basic food items and not other food products. We will limit to the basic food items which have to directly do with the psychology of this situation.

The initial moment saw an excess, but we are no longer going through the very first moment. We are now in the moment that we have to dot the ‘i’s’. I am very confident that we will succeed together and it will be a very positive experience from the human point of view, from the point of view of the partnership between us and you, as well as in terms of the result.

Thank you very much.