Frustrated by rising costs, Croatian citizens initiated a boycott starting January 24, targeting major retailers and urging consumers to halt all purchases, including dining and banking. With inflation at 4.5% and essential goods prices skyrocketing, the movement has garnered support from various groups. Economists suggest that factors like declining agricultural output and high VAT rates drive prices, while the government faces criticism for ineffective inflation control measures. The boycott’s success has inspired similar actions across the Balkans.
Frustrated by escalating costs, Croatian citizens have devised a creative approach to combat inflation. This movement, which began on January 24, has gained significant momentum and is starting to resonate beyond Croatia’s borders. Support has poured in from opposition parties, labor unions, various ministers, and notable figures. The impact was profound, with sales plummeting by 50% in just one day. In response, a new mobilization day is scheduled for this Friday, aiming to intensify their efforts.
“We aim to deliver an even more powerful message so that the Croatian market is properly regulated and a robust control mechanism is established,” remarked Josip Kelemen, an advisor from one of the consumer groups backing the boycott, during a press briefing on Thursday. He emphasized that the initiative targets “those responsible for this intolerable situation, this disaster affecting Croatian consumers.”
Targeted Retailers
On the second day of action, Croats are encouraged to refrain from making any purchases, whether in physical stores or online. This boycott extends to dining out, banking, and even refueling their vehicles. Additionally, participants are urged to extend their boycott to three major retail chains: Eurospin, Lidl, and DM, for an entire week beginning Thursday.
Moreover, consumers are advised to avoid purchasing specific product categories, including soft drinks, bottled water, and detergents, which have been particularly impacted by the current inflation crisis in Croatia, according to consumer advocacy groups.
Current Inflation Trends in Croatia
Inflation remains a pressing concern in Croatia, with rates reaching 4.5% in December, compared to a mere 2.4% average within the eurozone. Over the past three years, food prices have surged by more than 30%, with specific items like eggs and bread seeing increases of 58% and 44%, respectively. Social media platforms are flooded with comparisons showing the same products priced significantly higher in Croatia than in other EU nations. For instance, a German brand shampoo is priced at 3.35 euros in Croatia, reflecting a staggering 130% markup compared to its cost in Germany.
Even domestically produced goods aren’t escaping the price hikes. A kilo of Vegeta, a well-known Croatian spice blend, is sold for 7.69 euros in Zagreb, while it costs just 6.35 euros in Sweden, as highlighted by research from Index.hr. Milena, a retiree from Zagreb, expresses a common sentiment: “What once cost one Kuna now costs one euro.”
Who is to Blame?
Economists argue that retailers aren’t the primary culprits behind the rising prices. They point to long-term declines in agricultural output, a surge in imports, and the economy’s heavy reliance on tourism as significant factors. Additionally, a bloated public sector, a persistent labor shortage, and a VAT rate of 25% contribute to prices that can exceed those in Sweden.
“The billions spent on food imports are not a concern for other tourist-heavy countries. For example, Spain can adequately supply its tourists,” asserts economist Damir Novotny.
Government Response
The government is also under fire for its inability to rein in inflation. Prime Minister Andrej Plenkovic defended the state’s actions, which included capping prices on 70 essential consumer items. “Everyone needs to cooperate; a slight moderation in prices won’t lead to bankruptcy for anyone,” he stated during discussions with major distributors in the country.
Marko Knezevic, a steward, shared his commitment to the boycott: “I participated last week and will do so again. It’s a message to the authorities, highlighting that their policies have led us here by dismantling production while the bureaucracy expands,” he remarked. In the capital, many residents are opting to shop abroad. Dubravka, 45, shares her monthly shopping routine in Slovenia: “Even if some items aren’t cheaper there, I’m willing to pay taxes abroad as a way to protest against the Croatian government,” she confides.
What Lies Ahead?
The initial boycott’s success has sparked interest in neighboring countries, with calls for similar actions gaining traction across the Balkans. Social media in Bosnia, Montenegro, North Macedonia, and Serbia is abuzz with encouragement to abstain from consumption on Fridays. Organizers view this as a primarily symbolic gesture, holding merchants accountable for inflation.
However, several economists caution that the initiative may have limited impact, asserting that rising prices are not the sole driver of inflation. As Croatia, having joined the eurozone in 2023, grapples with a cumbersome public sector, one of the EU’s highest VAT rates (25%), and a declining population from 4.5 million to 3.8 million over the last 25 years, the challenges ahead remain significant. Currently, the average salary stands at 1,366 euros.