The planned 2 percentage-point rise in VAT will drive inflation, however, Erkki Laugus, CEO of the Kaubamaja department store in Tallinn told AK.

Prices are and will be related to the at-cost price buyers at Kaubamja pay for the goods they sell, he added, while the high world market prices and energy costs have their impact too.

"We have been seeing that in the case of food items, inflation has been experienced continuously via purchase prices. While it has been falling in recent months, we cannot say we have seen any substantive stabilization in the price situation," Laugus continued.

Ultimately, until energy price stability has been reached, and producers can see that it has been reached, no significant fall in prices to consumers will be seen, he went on.

Food prices are a clear driver in inflation at present, Laugus said.

"Inflation in clothing items has actually been significantly lower, and the same can be said for cosmetic products, with annual rises in price actually below the 10-percent mark," he continued.

"With food products on the other hand, we can see that there for some items, prices have risen by multiples, rather than by percentages."

Inventory is still being bought by consumers, Laugus added, and products imported for sale will not be pulled from the shelves as things stand.

Nonetheless, the planned VAT rise will as noted contribute to inflation, he said, which spells bad news for sellers and consumers alike, and will lead to a situation where Estonia has the second-highest VAT on food (at 22 percent) in the Eu

"This makes our region very expensive in terms of food," he said.

Logistics is another factor which may affect the availability of imported food products, he went on.

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