Turkey plans more steps on food prices after inflation nears 20 percent

Turkey’s government is planning to take further measures to control a surge in food prices after the increase helped spur consumer price inflation to almost 20 percent annually.

The Turkish authorities are considering giving powers to a supermarket ombudsman to manage investigations and punishments against retailers who abuse their market power, the Sabah newspaper reported on Wednesday.

The ombudsman would be tasked with preventing supermarket chains from gaining unfair profits in violation of the free market system by monitoring marketing costs and supply contracts, Sabah said.

Turkey’s government is seeking to curb food prices as the central bank cuts interest rates to help President Recep Tayyip Erdoğan stoke economic growth. The bank lowered its benchmark rate to 18 percent from 19 percent last month, surprising economists. Higher interest rates are used by monetary authorities around the world to slow inflation.

The government is also considering banning food retailers with a floor space of less than 1,500 square metres from selling products including cosmetics and stationary. It may also give permission for supermarket chains to open branches near major highways, Sabah said.

Earlier this week, Erdoğan said that the government would expand a network of stores run by a leading farm cooperative to help keep food prices in check. One thousand branches are planned. The government has already intensified inspections of food retailers to ensure they are charging a “fair price” for goods.

Turkey’s consumer price inflation accelerated to 19.58 percent in September from 19.25 percent in August, the Turkish Statistical Institute said on Monday. Annual food prices rose by 28.79 percent, the most among main product groups. The global price of food is increasing at a pace above historical averages due to supply constraints.