What we note is that the prices in stores are not cost-motivated, the pricing there takes place based on the conditions from competition and demand, says Arvid Fredenberg, chief economist at the Competition Authority to Dagens Nyheter.
One of the conclusions in the report is that the grocery trade and wholesalers in the food industry have shown stable profitability over the past 15 years.
Our analysis shows that the profitability in the industry has been stable for a long time, even during the years when prices rose sharply. This strengthens our previous assessment that competition in parts of the food chain is insufficient, says the Competition Authority's Director-General Marie Östman.
Lack of competition
The report shows that external factors such as inflation and increased raw material prices have played a role in the increased food prices, but a lack of competition has also meant that prices have been raised.
We see that if there was better competition, prices could be lower. It is in the retail sector that there are the greatest opportunities for increased competition with the help of new stores and possibly increased competition between existing stores, says Arvid Fredenberg.
In its previous report, the Competition Authority saw that several stores raised the price of a number of basic commodities more than justified compared to the price from suppliers.
The other costs did not increase at the same rate as the supplier prices. This means that it is not justified to maintain the same gross margin, but it is more reasonable to reduce it.
Takes a long time for new stores
Arvid Fredenberg means that food stores do not meet sufficient competitive pressure from other stores. In addition, it takes a very long time for new stores to enter the market.
Some municipalities are a bit skeptical of more food stores in their planning work for areas. It can take several years to get a building permit and establish a food store.
Now, the Competition Authority has initiated an investigation into Ica, which is suspected of competition-restricting agreements, according to Dagens Nyheter.
