The newly-appointed agriculture minister, Miroslav Toman, has said he will move to regulate the number of promotional campaigns in supermarket chains. The announcement comes in the wake of a controversial promo campaign at the German retailer Kaufland which recently offered shoppers a liter of milk for the price of just 1 crown.
The highly publicized Kaufland promo campaign had shoppers taking the retailer by storm, but it brought an angry reaction from the Agriculture Ministry which accused the chain of selling at dumping prices.
Now the new agriculture minister says it is high time to bring some order into the promo discounts race among supermarket chains that he says has spiraled out of control.
“There is no sense in barring temporary discounts on selected goods, that is a perfectly legitimate sales practice, but when some items are sold under production costs for months on end, something is clearly wrong,” Toman said in an interview for the news site idnes.cz.
Promotional campaigns at supermarket chains are a major phenomenon in the Czech Republic, where thousands of elderly people study sales leaflets before making a round of various stores. Supermarket chains are now caught up in the race, offering more and more promo campaigns throughout the year and sending out their agents on mystery shopping missions to rival chains. None of them want to risk losing profit by breaking the vicious circle.
The agriculture ministry says that promo campaigns lasting practically all-year-round on some goods are hurting Czech food producers and depriving the state of value added tax. Minister Toman says he will take steps to restrict the amount of goods that can be sold at a discount within a given promo campaign and the frequency of such campaigns in the course of the year, both of which are much higher than in other EU states.