Could the Middle East conflict open the door to price controls? Here’s how it works in Greece

The US-Israel war with Iran has sent shockwaves through the global economy and predictions of COVID‑era inflation are becoming hard to ignore. In many countries, these pressures are already being felt, as households struggle to afford essentials.

During and after the height of the pandemic, governments across the political spectrum experimented with price controls in a bid to protect people from soaring living costs. Spain and Mexico, for example, implemented such measures from the political left; Greece did so from the right.

They were a response to the pressures of inflation, weakened household finances and growing insecurity for large swathes of the population.

Among these examples, Greece’s “household basket” programme stands out as a detailed attempt to keep essential goods affordable. As consumers may once again be facing a cost-of-living price spiral, it is a case study worth examining.

Greece entered the inflationary period (2021-22) with some of the lowest wages in Europe. Its average pay is still just a third of that in Germany. When inflation hit 10%-12% in 2022, everyday necessities such as food, dairy products and basic household supplies quickly became more expensive.

In November 2022, the centre-right New Democracy government introduced the household basket, requiring major supermarket chains to keep prices low on more than 50 categories of essentials. These included bread, pasta, rice, dairy products, cleaning materials and baby food. Relevant items were highlighted clearly in stores, and the list was updated weekly.

Originally presented as a temporary tool, the programme has been extended repeatedly because of ongoing inflation – most recently due to concerns about conflict-related price spikes. It has become a central part of the country’s strategy to stabilise living costs, along with related measures including profit caps in the fuel sector.

A system based on transparency

What distinguishes the Greek model is how it combines regulation with consumer access to information via a digital platform. Large supermarket chains are obliged to publish the prices of their basket items online.

Once placed on the list, an item’s price cannot rise for seven days, though it may fall at any time. Retailers face fines of up to €5 million (£4.3 million) for violations. The scheme also requires supermarkets to submit supplier price lists, giving regulators insights into where mark‑ups occur.

The platform allows shoppers to compare prices across retailers and locate branches stocking specific items. All purchases must take place in person, maintaining the scheme’s focus on physical retail while improving transparency.

Beyond the basket itself, in 2025 the Greek ministry of development and retailers agreed price cuts of 8% on average for 2,000 goods – and profit margins on essential items were capped at their 2021 level. Inspectors conducted regular audits to enforce compliance.

Across many product categories, there were notable price declines. Among 56 breakfast foods and cereals, there was a price fall of up to 23%; among 34 cheese products, the fall was 5%-35%; and for fresh meat, the drop was 5%-7% across three products. On top of these, oils and fats dropped in price by 5%-16%, pasta by 3%-5%, and sweets and chocolate by 3%-17%.

The basket has gradually expanded to include pulses, fresh poultry, meat cuts, milk and cheese. The Greek government has also introduced short‑term “themed baskets” during periods of high seasonal demand. So far, Christmas and Easter baskets have included lamb, goat meat, turkey and chocolate Easter eggs to keep a cap on holiday costs.

Price controls remain controversial for some. Retailers in Greece have argued the system is unfair, and that they are unable to absorb the costs.

However, in the Greek case, supermarkets did accept reduced profit margins for the price-capped product lines. They responded with price wars to attract custom and boost market share, and with competitively priced own-brands. One consequence of these measures is that Greece now has a relatively cheap food basket compared with other EU countries.

In the UK at the height of the COVID pandemic, some large retailers raised prices above inflation – doubling their profits between 2019 and 2021-22. Under such circumstances, many may feel it is only fair to ask them to contribute to combating a cost-of-living crisis.

So, while price controls may not always please retail and other sectors, they are becoming more common. Many countries have been experimenting with ways to contain the cost of living, as practical tools to stabilise inflation and support citizens during unpredictable economic shocks.

Greece’s experience shows that such measures can be structured, transparent and enforceable. It also demonstrates that price controls need not be limited to one political tradition. They have been deployed by governments across the ideological spectrum when faced with inflationary pressures.

As the UK braces for further economic turbulence, triggered by conflict and volatile energy markets, Greece’s family basket offers a model worth studying. It is not a full solution to high inflation – nothing so simple exists – but it shows how governments can intervene to reduce pressure on households while maintaining oversight of essential markets.

A political party ready to champion measures that deliver immediate relief to struggling households could resonate widely at a moment when many people have yet to recover from the last cost‑of‑living crisis.

Benjamin Selwyn does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.