Due in large part to tax increases, food and drink prices have risen in Estonia. Next year's additional taxes however, are set to push up food prices even further.

Non-alcoholic beverages rose in price by 20.4 percent in October, according to data provided by Statistics Estonia. Over the year, there has been a 5.8 percent increase in the cost of food, as well as alcoholic and non-alcoholic beverages. However, food was no more expensive in October than in September.

Jaan Härms, head of Saku Brewery, said the company's figures for the first nine months of 2024 also show an increase in the retail price of Saku products.

"Beer and other low alcohol beverages – their price increases this year have been in the range of four-and-a-half to five-and-a-half percent, depending on the product category. This is definitely down to the VAT increase at the beginning of the year, but as you also know, alcohol excise duties have gone up. That's the kind of increase you'd expect," Härms said.

"And if we are talking about non-alcoholic beverages, the increase in the water category has been somewhere around three and a half percent. Where the increase has been a little bit higher is in soft drinks – the average price rise has been about ten percent," Härms said.

Next year, non-alcoholic beverages will become even more expensive due to the increase in VAT, and alcohol too as a result of the increase in excise duties, Härms said.

Oliver Rist, purchasing director of Coop Estonia, said prices in Coop stores have risen by 0.2 per cent on year and people are increasingly buying only discounted products.

"The number of product promotions is increasing, so people are actually actively searching for them and optimizing the cost of their shopping basket as a result," said Rist.

However, according to Rist, the general rise in food prices is not surprising. "Most of the increase in the price of an average shopping basket is purely due to the fact that last year we had a different VAT rate for food and consumer goods," he said.

Household confidence remains poor, according to Swedbank economist Liis Elmik, and is being affected by price rises, which Swedbank forecasts will accelerate from 3.7 percent this year to 4.3 percent in 2025.

"Food prices have started to rise again, and this will gradually feed through to prices on the Estonian market," Elmik said.

"In general, what we are seeing is that for those groups of goods that people buy more often and for which they know the price, there is also new competition, and there the price increases are smaller. And for the goods that people buy less frequently, the margins are higher and that's where the price increases have been faster recently."

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