November's exceptional price increase: All food prices have gone up on year

Fresh  produce at a Räpina grocery store.
Fresh produce at a Räpina grocery store. Source: Aili Vahtla/ERR

Never before has Estonia seen a price increase like this, in which all food products without exception have gotten more expensive on year, said Estonian Institute of Economic Research (EKI) Director Marje Josing, who has been tracking food prices in the country for decades.

Over the past year, milk, egg, grains, cooking oil and sugar alike have all gotten significantly more expensive.

The EKI regularly monitors changes to retail prices in Estonian stores and markets. In a side-by-side comparison between this November's supermarket prices and last year's, the difference is considerable.

For example, a regular small package of butter, containing at least 80 percent butterfat, cost an average of €9.52 per kilogram last November; a year later, that has gone up to more than €13.

Josing told ERR that on year, the prices of grains, cooking oil and sugar have increased the most. The biggest driver behind household grocery bill increases, however, is meat and meat products.

"Thankfully pork prices in Europe have remained low," she noted, adding that the amount of imported meat has gone up. "Beef has gotten significantly more expensive, but people in Estonia buy less of it. People have been buying more chicken and pork."

Last November, beef cost €11.36 per kilogram on average; by last month, it had gone up to €15.91. Pork chops, meanwhile, have risen from €6.96 to €8.33 per kilo on year.

In addition to milk, the price of a bagged liter of which has gone up from €0.54 to €0.85 on year, the price of kefir has gone up as well — from €0.67 to €0.89 percent on year. Cottage cheese has also gotten more expensive, increasing from €4.38 to €5.42 per kilo.

According to Josing, households with children going through more yogurt than usual are feeling the impact of rising yogurt product prices as well.

She noted that the research institute has been conducting price analysis for 30 years already, and never before has she seen things look like this before — the price of an item in a store can jump by 50 percent in a matter of just a week, and price differences between stores are relatively significant.

"The same oil is being sold for €6 in one store and €3 in another," the EKI director said. "In fact, the retail market has been completely turned upside down. Of course food prices have been going up for years — when we first started in 1992, a weekly minimum basket [of groceries] cost €10, and now it costs €100. But a situation where prices increase in a matter of hours and days — it's like nothing I've ever seen before."

Vegetables have seen prices go up significantly as well. Potatoes, cabbage and carrots have all gotten more expensive, and tomato prices in November, for example, increased from €2.02 to €3.04 per kilo on year. Onions have also gone up from €0.52 to €0.75 cents.

Despite the significant percent increase, however, vegetables have remained relatively affordable for consumers, Josing noted.

EKI's price information doesn't include details regarding how much each product costs across various supermarket chains. The institute director explained that at one point they had started comparing prices between chains as well, using specific products such as a package of Rakvere minisausages and a particular loaf of bread and recording their prices at various stores.

"Then what happened was that we couldn't keep up with the selection anymore — when it was announced that the minisausages were cheaper at Prisma, by the next time they cost the same at every store," Josing said regarding the decision to publish average prices instead. "Nobody likes it when fingers are pointed, in terms of business interests."

Rye and white bread also cost shoppers significantly more this November than during the same time last year.

Last November, rye bread cost €2.01 per kilo on average — on year, it had increased to €2.60. White bread prices went up even more, jumping from €1.81 to €2.51 per kilo. Oatmeal prices rose significantly on year as well, from €2.28 to €1.44 per kilo.

Stores have noticed that rapidly increasing prices have shoppers increasingly keeping an eye on sales and choosing discounted goods specifically. The EKI, however, bases its price overviews on the average of several different brands' products of the same quality. In determining the average price of butter, for example, this means that both sales and full prices are taken into account.

The institute bases its overall cart on prices at all of Estonia's major supermarket chains and has price watchers monitoring supermarket prices throughout the country.

Food prices nonetheless don't increase constantly. Josing highlighted for example that some food prices even went down during the economic crisis in 2008-2009.

Prices in Estonia are primarily dependent on producer prices — e.g. how much potatoes or grains cost to produce. Global market prices play a role as well; when global coffee or sugar prices, for example, have gone up, Estonia's retail prices for them have followed suit.

Food price increases have started to slow, and Josing believes that the fastest price growth is over by now, but uncertainty remains ongoing.


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Editor: Aili Vahtla

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