Nordic countries to jointly investigate high price of food
Nordic competition authorities plan to investigate why foodstuffs in Nordic countries are more expensive on average than in other European countries. The goal is to unearth possible obstacles to free competition.
The study will cover the competitive situation on the foodstuffs market in Finland, Sweden, Denmark, and Norway. The report of the working group will be published in September next year. Previous investigations into competition on the Nordic level have taken place in the energy and telecommunications markets.
The Finnish Competition Authority does not yet wish to determine the exact target of the investigation.Juhani Jokinen, the head of the Competition Authority, observes that Finland has a rather centralised foodstuffs industry and wholesale sector.
Also, foreign competition is not present in many situations.
Jokinen believes that the project will focus on the region between the industrial sector and retail sales. Also, barriers to market entry will be scrutinised. “The main question is whether something should be done to make it easier to enter the market”, Jokinen says.
Jokinen emphasises that free market entry leads to more competition, and lower prices.
Statistics put out by Swedish competition authorities show that the price of food exceeds the EU average clearly in all Nordic countries. In Norway and Iceland, food is 56 percent more expensive than the EU average, with the Danish premium is at 41 percent, Sweden’s at 24 percent, and Finland’s at 23 percent.
Value-added-tax also affects prices: the Danish VAT is 25 percent, and the Finnish VAT on foodstuffs is 17 percent. The EU average is 6.5 percent. The Finnish foodstuffs industry has long sought a tax cut to the Swedish level of 12 percent.
Trade Policy Director Lea Lastikka from the Finnish Food and Drink Industries’ Federation observes that after the German retail chain Lidl opened outlets in Finland, food prices have begun to fall. “In the rather centralised structure, this has been possible due to the introduction of generic private label products in new product groups”, Lastikka explains.