Zagreb, Sept 4 - Shops in Croatia, led by the country's leading retail chain, are slashing prices after the government called on the private sector to help reduce the pain of inflation, now at a 14-year high.
Food retailer Konzum said in a statement faxed to Reuters on Thursday it had cut prices "wishing to contribute to overall lowering of prices... As the biggest retailer, we are aware of our responsibility for consumers."
Konzum, which controls a quarter of the country's retail sector, cut the prices of 22 staples, like bread, milk, oil, sugar, and diapers by between 12 and 15 percent, prompting competitors to take a similar course.
The move follows scenes from across the Adriatic Sea last week, where pizza chefs in Naples handed out free pizzas in response to a popular outcry in Italy over higher prices.
Although Croats did not stage any protest rallies against this year's spike in food and oil prices, they welcomed the move started by Konzum.
"This is great. Honestly, I can't remember the last time so many products became cheaper. It is always the other way round," said pensioner Ljiljana Maric as she strolled down the aisles of one of Konzum's many shops in the capital.
Inflation jumped to 8.4 percent in July, the highest since Zagreb beat back double-digit inflation in 1994, prompting Prime Minister Ivo Sanader to urge retailers to help out "instead of striving to have profit margins of 100 percent".
The Business.hr financial daily splashed the photo of Konzum's owner, Ivica Todoric, on its front page, with the headline "Only for you, dear Ivo", a reference to Sanader.
Konzum management declined it had been pressured by the government but said it had "taken into account" Sanader's comments.
Agriculture Minister Bozidar Pankretic told Jutarnji List daily the government was holding talks with major food producers to persuade them to slash prices.
But some pundits were concerned that the government was meddling too much in the private sector, a throwback to the socialism that ruled Croatia for half a century until 1990.
"Instead of a free market, we obviously still have a command economy at work," said an editorial in Business hr.