ROMANIA: Three quarters of the money generated by the VAT reduction returned to market | Progresiv
Three quarters of the total, 76%, which the Romanians would have been able to save from the price decrease as a result of VAT reduction on food products in June, was reintroduced in the fast moving consumer goods purchase circuit, according to a study made by research firm GfK Romania based on data collected from the Households Panel. 
Thus, more than half of disposable income from the VAT reduction were directed to food products and non-alcoholic beverages, while 17% of the amount went to the non-food consumer products (personal care and home care). The remainder stayed in the pocket of Romanians or other expenses or for saving.
The purchasing behavior has changed from the initial moment of impact of the falling prices. At first, though still 70% returned to the FMCG, proportion between food and non-food products was approximately equal (June-July 2015).
At the same time, especially for personal care items, there is a tendency to buy products in a higher price segment, GfK noted.
Meanwhile, this phenomenon has diminished, returning the money mostly to food products.
The study is based on data from the GfK Romania Household Panel, which follows the structure modifications of the shopping basket, 3,000 nationally representative households being analyzed.
Present on the local market since 1992, GfK Romania is one of the leading market research companies, with a turnover of 16.2 million euros in 2014.
