Finnish business daily Taloussanomat recently compared grocery prices at Prisma supermarkets located in the Estonian and Finnish capitals. The results of the survey revealed that Finns already have to pay less for some grocery items than their southern neighbors in Estonia do.
According to the paper, high food prices have Finnish consumers upset, but the situation across the gulf in Estonia is even more complicated. The prices of goods and services in Estonia have been inching closer to Finnish price levels for quite some time already, and annual inflation in February stood at 17.6 percent in Estonia, compared with 7.9 percent in Finland.
At the beginning of March, Taloussanomat compared the prices of grocery staples at Kristiine Prisma in Tallinn and Itäkeskus Prisma in Helsinki. Choosing S Group store brand products, prices ended up favoring the Finnish side: the same grocery haul cost €55 in Tallinn and €52.15 in Helsinki, reported Ilta-Sanomat (link in Finnish).
Imported tomatoes, for example, cost €3.79 per kilogram in Tallinn and €3.19 in Finland. Domestic potatoes, meanwhile, cost €1.50 per kilogram in Estonia and just €0.85 in Finland. Margarine was likewise cheaper in Finland, while the price of rice in both countries' stores was practically the same.
Soft drinks and coffee, meanwhile, were still cheaper in Tallinn than Helsinki, as were Estonian-produced meat and bakery products.
The paper highlighted that prices may vary in Prisma based on a specific store's location and size. Nonetheless, it found that one cannot automatically assume anymore that food is cheaper in Estonia.
The overall level of food prices in Estonia is still lower than in Finland, but this applies primarily to goods produced in Estonia. Food is subject to a higher VAT rate in Estonia than in Finland as well — 20 percent compared with Finland's 14 percent.
"The increase in production costs has been higher in Estonia than in Finland," said Prisma Peremarket CEO Ilkka Alarotu. "This is due to electricity and heating prices as well as wages."
Procurement director: Depends on exact products
Prisma Peremarket procurement director Kaimo Niitaru weighed in on the survey as well.
"In the case of groceries being sold in Estonia and Finland, one of the most crucial contributing factors to the difference in prices is different VAT rates," he highlighted. "It's 14 percent in Finland and 20 percent in Estonia."
Prices are of course impacted by the transport of goods to Estonia as well, the procurement director added.
"This result depends on the specific products selected for comparison," he said. "If the comparison included the cheapest products in all food categories, for example, the shopping cart in Estonia would have been significantly cheaper."
Editor: Aili Vahtla