Romanian Govt. passes anti-price gouging law, despite economists’ criticism

Romania’s Government adopted on Thursday, June 16, a draft emergency ordinance that aims to combat price gouging, the practice of increasing the price of a product to a level much higher than what is considered reasonable.

The ministers claim that the measure will apply only to a series of products or categories of products and services that, if affected by price gouging, can threaten the proper functioning of the economy or the welfare of Romanian consumers.

After identifying these products or categories of products and services, the Government plans to prohibit sellers from charging unjustifiably high prices for them, limiting their production or sale, or accumulating them in order to create a deficit and then resell at the higher price. The Government intends to impose these prohibitions for a limited amount of time.

Economists and several large retailers have labeled the draft ordinance as a populist advent, arguing that government involvement will affect the functioning of the market and that the law leaves room for abusive interpretations.

“Producers and consumers will be directly affected by the state’s interference in the market,” said economist Cristian Păun, quoted by Economedia.ro.

Feliciu Paraschiv, Vice President of the National Association of Small and Medium Traders in Romania (ANCMMR), echoed the same concerns, saying that the Government intends to empower the National Authority for Consumer Protection (ANPC) to such an extent that it will be in control of the private business sector.

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