Food prices visible – that's why you're paying too much

You pay more for food than you needed to, shows the Competition Authority's latest survey of the food industry. The reason? There are deficiencies in competition in several aspects of the industry, notes Martin Bäckström, unit manager at the Competition Authority (KKV).

» Updated: July 31 2024

» Published: June 07 2024

Food prices visible – that's why you're paying too much
Photo: Janerik Henriksson/TT

You pay more for food than you need to, shows the Swedish Competition Authority's latest review of the food industry.

The reason?

There are deficiencies in competition in several aspects of the industry, notes Martin Bäckström, unit manager at the Swedish Competition Authority (KKV).

Lack of competition in the food chain affects price tags in the country's food stores. According to the authority, the consequence is that the money "does not always end up where it is needed to promote new establishments, investments, and increased production".

Paying more

Too few players in the daily goods trade and processing industry lead to problems, notes Bäckström.

Consumers pay more than they would need to, and the money does not end up in the channels that would stimulate production or new actors to enter the market, he says to TT.

In the review, prices of products such as butter, bread, eggs, chicken, cooking oil, potatoes, and cheese have been examined. The Swedish Competition Authority concludes that the peak of price increases for food was reached in March 2023. Since then, prices have remained at a high level.

The largest price increases have occurred in the supplier segment, but the daily goods trade has simultaneously been able to increase profit margins, according to the report.

Karin Brynell, CEO of Svensk Dagligvaruhandel, questions how the Swedish Competition Authority came to the conclusion that margins would have increased in the industry.

We do not agree. In all financial reports, we see that profit margins have decreased.

Increased costs for stores

Karin Brynell believes that the Swedish Competition Authority's review only takes into account the gross margin. But a store has many more costs that also affect a food item's price tag.

A store also has interest costs.

Then they abolished the reduction of employer contributions for young people, and we have got increased transport costs, she continues.

No low-price stores

The industry organisation finds it difficult to predict lower food prices in the future – the question depends on the development of our currency and interest rates, explains Brynell.

The Swedish Competition Authority proposes measures that are believed to have an impact in the long run. Among other things, the authority wants to be able to stop acquisitions on local markets.

Furthermore, the country's municipalities would need to create more retail spaces, which would contribute to better competition.

In about 90 municipalities, there is a lack of low-price stores, notes Bäckström.

Tags

TTT
By TTTranslated and adapted by Sweden Herald

More news

US Finance Minister: Reduce Tariffs with China for Fair Trade
1 MIN READ

US Finance Minister: Reduce Tariffs with China for Fair Trade

Eli Lilly Stock Drops Despite Strong Quarterly Growth
1 MIN READ

Eli Lilly Stock Drops Despite Strong Quarterly Growth

McDonald's Reports Largest Sales Decline in Five Years
1 MIN READ

McDonald's Reports Largest Sales Decline in Five Years

Tax Return Deadline Approaches: How to Avoid Late Fees
3 MIN READ

Tax Return Deadline Approaches: How to Avoid Late Fees

Tesla Board Denies Search for Elon Musk's Replacement
2 MIN READ

Tesla Board Denies Search for Elon Musk's Replacement

Tokyo Stock Exchange Sees Gains as Interest Rates Hold Steady
1 MIN READ

Tokyo Stock Exchange Sees Gains as Interest Rates Hold Steady

Japan Keeps Interest Rate Steady at 0.5 Percent
1 MIN READ

Japan Keeps Interest Rate Steady at 0.5 Percent

Meta Surpasses Q1 Expectations, Shares Rise in After-Hours Trading
1 MIN READ

Meta Surpasses Q1 Expectations, Shares Rise in After-Hours Trading

Wall Street Rebounds After US GDP Decline in First Quarter
2 MIN READ

Wall Street Rebounds After US GDP Decline in First Quarter

Swedbank Swish App Issues Resolved for Customers
1 MIN READ

Swedbank Swish App Issues Resolved for Customers

Trump Blames Biden for US GDP Decline in First Quarter
1 MIN READ

Trump Blames Biden for US GDP Decline in First Quarter

US GDP Falls 0.3 Percent in First Quarter Amid Recession Fears
2 MIN READ

US GDP Falls 0.3 Percent in First Quarter Amid Recession Fears

Hotel Room Prices Drop as Demand Decreases in April
1 MIN READ

Hotel Room Prices Drop as Demand Decreases in April

Euro Area GDP Growth Surpasses Expectations in First Quarter
1 MIN READ

Euro Area GDP Growth Surpasses Expectations in First Quarter

Heart Aerospace Moves Headquarters from Gothenburg to Los Angeles
1 MIN READ

Heart Aerospace Moves Headquarters from Gothenburg to Los Angeles

Thailand Central Bank Cuts Interest Rate to 1.75 Percent
1 MIN READ

Thailand Central Bank Cuts Interest Rate to 1.75 Percent

Stockholm Stock Exchange Rises Despite Evolution's 19% Stock Plunge
1 MIN READ

Stockholm Stock Exchange Rises Despite Evolution's 19% Stock Plunge

Debt Cases Drop in Sweden but Total Debt Rises Sharply
1 MIN READ

Debt Cases Drop in Sweden but Total Debt Rises Sharply

Stellantis Withdraws Financial Guidance Amid Trump's Trade Tariffs Impact
1 MIN READ

Stellantis Withdraws Financial Guidance Amid Trump's Trade Tariffs Impact

SBAB Increases Market Share in Mortgage Lending
1 MIN READ

SBAB Increases Market Share in Mortgage Lending