Not only the subjective feelings of people, but also objective statistics show that food prices in stores grow and grow, but income does not increase. A crying Latvian pays as much for milk, meat and bread as a rich German and more than a Lithuanian and a Pole.
Food prices in Latvia reached the average level of the European Union (EU) already at the beginning of 2022. In 2023, according to “Eurostat” data, food prices in Latvia were 3.7% higher than the EU average. More recent data has not yet been compiled, but the trend was set to grow and is expected to exceed the EU average by over 4% in 2024.
At the same time, food prices in Estonia are even higher, exceeding the EU average by 9.2% in 2023. So it will exceed 10%. In Lithuania, this same indicator came close to the EU average, only 0.9% behind the EU average. Apparently, Lithuanian food prices will also have reached the EU average this year.
Like the statistics, there are also feelings when you travel to Lithuania and Estonia – this and that are a little more expensive in stores in Estonia. “Genre Classics” are alcoholic beverages where sparkling, spacious stores have been built on the border of Latvia, especially for Estonian and Finnish alcoholic tourists.
On the other hand, in Lithuania, shops feel that this one is a little cheaper, but what is very concrete is the truth – medicines have a much lower price in pharmacies and fuel at filling stations. Some medicines are even a third cheaper, but fuel, if you look for it, can be found even 20 euro cents cheaper per liter.
9.99 euros seems cheaper than ten
The biggest supermarkets of the three Baltic states always perform all kinds of marketing tricks, manipulate discounts, so it is not easy to understand who really has a discount, but who has been paying what they have for a long time.
The discount brochure “Rimi” says that until November 18, fresh chicken meat produced by “Ķekava” has a discount of up to 29%, Atlantic salmon fillet 52% and costs 6.99 euros , “Laima” chocolate is 50%, and they cost 8.49 Euros per kilogram. Attractive price for potatoes – 63% discount and a price of 0.29 euros per kilogram. Yes, potatoes did not cost so little before.
In the brochure “Maxima”, there is a 40% discount on chocolate “Laimas”, processed cheese “Dzintars” costs 1.39 euros, mayonnaise “Francis” – 0.79 euros, pork neck chops – 4.69 euros per kilogram . “Maxima” does not lie about “Amber” and “Franci”, because these products cost more recently.
“Lidl” offers country cucumbers with a 43% discount, salmon for 6.99 euros per kilogram, a selection of cheeses with a 20% discount, etc.
People are forgetful and don’t remember that some products have been at the same price for months and are considered discounted. In all supermarkets, so that the buyer does not seem expensive, the price of many things is one cent lower than a round number.
The chains “Rimi”, “Maxima” and “Lidl” have a similar policy in neighboring countries.
However, even in chain stores of the same name, the same product tends to have a different price. For example, “Kārums” cheese costs 0.33 euros in Lithuanian “Rimi”, 0.39 euros in Latvian “Rimi”, and 0.55 euros in Estonian “Rimi”.
There is no question about Estonia, but how can cheese in Lithuania cost less than in Latvia if it is made in Latvia? It must be brought to Lithuania, whatever it is
additional costs. But it happens, because there are different traders in Lithuanian and Latvian “Rimi” and they may have different ideas about how much discount is needed and what the price should be. The “treat” is the same as the statistics – more expensive in Estonia, in the middle in Latvia, cheaper in Lithuania.
Estonians and Lithuanians can buy more
Everything would be fine if the average salary of Latvian citizens and GDP per capita were at the EU average level. And if the purchasing power parity (ratio of income and cost of living) was at least the same as the neighbors. However, in terms of purchasing power parity, GDP is far behind not only in Estonia, but also in Lithuania – the real income of Latvian residents is significantly lower than in Estonia and Lithuania.
According to Eurostat data, the indicator adjusted GDP per capita in 2023 is 38,700 in Estonia, 32,600 in Lithuania, and 26,600 in Latvia.
The average of EU countries is 39,100.
It is lower in Bulgaria than in Latvia, but Romania has already jumped past us and has come close to Estonia in this indicator.
What are food prices like in Europe?
According to “Eurostat” data, the prices of food and non-alcoholic beverages can be described as outrageous in Iceland, Switzerland and Norway – they exceed the EU average by 120%. But salaries and all kinds of indicators of the standard of living are also at the highest level in this regard.
Between 110 and 120% above the EU average for food and lemonade is paid in Finland, Luxembourg, Denmark and Ireland.
On the other hand, people pay much lower than the EU average prices (less than 80% of the EU average) in Poland and Romania.
Food prices are also lower than the EU average (90-100%) in Spain, the Czech Republic, and (who would have thought!)
Latvia is in the middle and we can be proud that our food costs about the same as Germany, Slovakia, France, Austria, Italy, Greece and Sweden. The purchasing power index, which indicates the standard of living in Germany alone, is 43,400 Since it is 26,600 in Latvia, one “average Latvian”, looking at a food basket with meat, can tomato, cheese and lemonade, 26.6 euros to pay. to buy, while German – 43.4 euros. Germans are not the richest in the EU – Luxembourg can pay twice as much.
Estonians suffer high prices in the name of greater happiness
Estonia’s tactics and strategy are clear – to get closer to Finland and the Nordic countries in every way, where everything is bigger – prices, wages, standard of living, social comfort and happiness. Estonians drag on and accept that they have to pay 110% of the EU average for food, believing that wages and happiness will eventually catch up with the prices.
However, Latvians have reason to worry about falling behind Estonia, as well as looking the other way. Lithuania has more inhabitants (2.87 million), a larger area and, therefore, a larger market. There are more players in this market. There are strong peasant organizations in Lithuania, which do not allow people to get in their way. It cannot be said that there are many more supermarket chains in Lithuania, but a market partner that promotes competition, “Lidl”, has been operating in Lithuania for a long time, and in Latvia it is just starting.
However, there should be many more supermarket chains – it seems that in Latvia you cannot complain about the number of them – “Rimi”, “Maxima”, “Lidl”, “Elvi”, “Mego”, “Prisma” and other chains. , but that is about not enough to compete between them.
It is difficult to compete with Poland or Germany – they are a bit “other planets”, their markets are very large, so the competition is more natural and less movement with cartels. Food prices in Poland are 22% lower than the EU average! However, there are few market participants in Latvia and they can keep prices high.
The minister’s campaign for lower prices
Economy Minister Viktors Valainis (ZZS) has said that he wants to achieve a reduction in food prices. His proposals have been supported by the coalition. It is planned to put a ceiling on the marking of shopkeepers, to set the lowest price in each product category, to introduce a digital tool for product comparison, as well as to prevent the destruction of unsold food products. It is also intended to prevent excessive and long-term discounts
Naturally, shopkeepers do not like such measures, and the supermarket lobby is expected to react strongly.
It is not known how it will end, it is difficult to predict whether the minister will be successful in achieving a 20% reduction in food prices.
Indeed, Latvia’s future success requires not only price reductions and prevention of competition distortions, but also labor productivity and productivity, innovation and new technologies, the use of artificial intelligence and small nuclear plants that produce electricity cheap We need to implement exports and develop infrastructure. Reducing the price of sausage by 20% will not do much if the purchasing power parity lags behind Estonia by 40%.
2024-11-17 03:37:00
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