An amendment tabled in parliament on Tuesday will cap maximum profit margins for the sale of domestic appliances subsidized under the development ministry’s “Change my appliance” program. The cap was apparently considered as a necessity after consumers eligible for the subsidy denounced “price hikes” in air-conditioners, refrigerators and freezers.
The subsidy program seeks to encourage a switch to more energy-efficient models by offering a subsidy to buy new appliances in exchange for the withdrawal of the older appliances, such as air-conditioning units, refrigerators and freezers.
The cap in the amendment restricts gross profits on the sale of each appliance to the equivalent profit per unit up until December 31, 2021 in a bid to avert price-gouging and protect consumer purchasing power, as well as ensuring the maximum effectiveness of the program and that the benefits go to consumers, thus maximizing purchases of more energy-efficient appliances.
The cap will apply for the duration of the “Change my appliance” program.
Violations carry escalating penalties, starting from a warning to stop overcharging to fines that range from 5,000 to one million euros.
The same amendment also extends a law allowing the government to publicize the names of companies that violate the excessive profits restrictions in times of crisis until the end of the year.