Erdogan invents new method to combat inflation:  Grocery chains forced to fix prices

Six supermarket chains in Turkey have announced that they fixed prices for thousands of products during January, reported Duvar English. The announcements came after President Erdogan blamed supermarket chains for stoking inflation. One major food retailer, BIM, which objected to the accusation was severely criticized in pro-government media, resulting in the resignation of its CEO and threats of ransacking its storage units.

Turkey’s leading supermarket chains (Şok, Migros, CarrefourSA, A101, BİM, Happy Center) have announced that they fixed prices for thousands of products during January.

The chains said that they fixed prices for especially staple food products “to fight with inflation” in separate announcements.

Grocery chain Şok was the first to announce the move, saying that they fixed prices for 1000 products to “contribute to the country’s economy and the budget of customers.”

Migros and CarrefourSA also announced that they cut prices for 3000 and 20,000 products respectively.

Turkish Finance and Treasury Minister Nurettin Nebati said on Jan. 5 that “Dear friends who fix prices. I congratulate them from the bottom of my heart. I also call on all our businesses to implement similar practices.”

Critics say that this practice of fixed price is mainly implemented in cheaper products. Other claim such efforts will inevitably lead to price pressures being reflected up the supply chain, forcing smaller food producers into losses and most importantly, reducing the prices farmers receive for their produce, inflating Turkey’s food shortage problem in the coming months.


Turkish economist Hayri Kozanoğlu told daily Sözcü that this practice will make consumers buy poor quality, inadequate products. “People are condemned to a poor quality life,” he added.


These moves came after President Recep Tayyip Erdogan and officials from the Justice and Development Party (AKP) blamed chains for rising inflation.


Previously, Erdogan’s ally Nationalist Movement Party (MHP) leader Devlet Bahçeli claimed that supermarket chains have connections with “FETÖ,” the group widely believed to have orchestrated the July 15, 2016 failed coup attempt, which is officially called the Fethullahist Terrorist Organization (FETÖ). For a few years, pro-government figures have been blaming every kind of dissident for having connections with the Gülen network.


“We also believe that the relationship of the market chains that constantly hike prices with FETÖ should be carefully investigated,” Bahçeli said on Nov. 22 during his party’s parliamentary group meeting.


Then, Erdogan said on Nov. 30 that “We will tighten the controls on market chains, we will find ways to eliminate price differences, we will monitor them.”


Pro-government retail company BİM’s Executive Board Member Galip Aykaç responded to Bahçeli’s claims and said on Dec. 1 that “We have something to say to the party leaders who threaten us with FETÖ. The people of this country did not respect your lies in any way.”


Later, Aykaç had to resign from the presidency of the Food Retailers Association.


During this period, some BİM branches were sealed shut by mayorships ruled by the AKP.


On Dec. 26, Turkish Trade Minister Mehmet Muş said in a tweet that he had a meeting with the managers of the four chains that have the most branches in Turkey and “warned them” not to increase prices after the minimum wage hike.

For December, the government-run Turkish Statistical Institute (TÜİK) reported an annual inflation rate of 64.27, whereas the independent inflation group ENAG put the figure at 137.55%.

Majority of Turkish citizens cannot make ends meet amid skyrocketing inflation.  The effort to fix prices will have marginal to modest impact on overall inflation and on Erdogan’s approval ratings.

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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.