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Erdogan Hunt for Treason in Price Hikes Depletes Veggie Shelves

Erdogan Hunt for Treason in Price Hikes Depletes Veggie Shelves

(Bloomberg) -- Shamed by President Recep Tayyip Erdogan for failing to keep prices lower, Turkish retailers are emptying shelves of some items altogether.

Some supermarkets won’t sell green peppers and aubergines, two of the ingredients used widely in Turkish cuisine and whose wholesale prices have soared as high as 10 liras ($1.9) per kilogram, Hurriyet reported Tuesday.

Since they’d fetch 20 liras at a supermarket, “no one wants to take this risk,” Mustafa Altunbilek, head of the Turkish Retailers Federation, was cited as saying by the newspaper.

The unprecedented reaction follows Erdogan’s call to municipalities to hold responsible those who are to blame for higher costs. As inflation spiked to a 15-year high in 2018 following a run on the lira, the government has resorted to market interventions to control price increases, going as far as deploying local police forces to monitor stores and sending officials to inspect onion warehouses.

Erdogan Hunt for Treason in Price Hikes Depletes Veggie Shelves

“This is not commerce,” Erdogan was cited as saying in a Jan. 26 speech by state-run Anadolu Agency. “This is opportunism, hypocrisy and usury. Furthermore, this is treason to the nation.”

The Turkish leader, who once declared himself an “enemy of interest rates,” is looking for shortcut solutions at a delicate time for the government, as the nation nears local elections on March 31. While annual food inflation has slipped slightly in the past two months, it remains at over 25 percent, ending 2018 at almost double the level the previous year. For green peppers, wholesale prices in Istanbul have jumped about threefold since early 2018.

While price pressures are stubbornly strong across the economy, rising vegetables costs reflect a supply shock from last week’s flash floods in Antalya, Turkey’s hub for greenhouses. Adverse weather damaged an unspecified number of greenhouses and gardens across the province, Anadolu Agency reported.

“In the aftermath of natural disasters, prices of some goods rise and we don’t sell them under such conditions,” Galip Aykac, the chief operating officer of BIM, the nation’s biggest grocery by sales, said by phone. “Currently, we don’t sell aubergines and green peppers.”

Representatives of farmers and wholesale traders who complained about purchasing practices by supermarkets said the decision to clear the shelves of some items amounts to defying Erdogan.

“Supermarkets win, farmers lose,” Mehmet Ozkurnaz, head of the Agriculture Cooperatives Central Union, said by phone. “This decision won’t bring peace to the market.”

To contact the reporters on this story: Taylan Bilgic in Istanbul at tbilgic2@bloomberg.net;Ercan Ersoy in Istanbul at eersoy@bloomberg.net

To contact the editors responsible for this story: Onur Ant at oant@bloomberg.net, Paul Abelsky

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