Very high vegetable prices in Sweden are driving the highest level of food price increases in the country in 72 years, while they also contributed to the highest inflation in 30 years. Sweden's inflation was up to 12% in February 2023, according to the high-income countries' latest released Consumer Price Index (CPI) figures, leaving many consumers struggling to afford the basics.
Experts in the country say Sweden has not seen such drastic increases in food prices since 1951. Leeks and cauliflower have increased by about 80% since February 2022, and peppers by 54% since then.
"The inflation rate was affected by a widespread price increase within food, but vegetable prices increased slightly more than other food products," said Mikael Nordin, a statistician at Statistics Sweden.
According to Peter Horvath, from Svenska Odlarlaget, one of the largest Producer Organizations in the country, regarding the sale of Swedish fruits, vegetables, and berries, the Russian war in Ukraine and the higher energy prices are the cause of the higher prices.
"The high CPI is mainly caused by the lack of energy and the energy pricing models. This is mainly caused by the Russian aggression on Ukraine and a slow-acting EU. The export of electricity, pellets, and woodchips has increased from Sweden, and prices are rising on all kinds of energy sources."
He says this affects and makes production more expensive in both Sweden as well as the European supplying countries. "As a consequence, we need to sell at higher price levels, and major European growing areas do not believe the market accepts those prices, so they cut down production, and then again, we get less volumes and even higher prices. The uncertain weather in southern Europe deepens the production dips," says Horvath.
More and more social food stores are opening for the economically vulnerable in Sweden. Retailers through the Grocery Suppliers Association donate to stores where people can buy at reduced prices, leading to less food waste.
On a retail and governmental level, he says they have a history of setting price increases in percentage. "A history of counting everything (prices/costs/increases) in percentage % is aggravating the situation. The fixed VAT in % is probably the worst issue in this case. Faster moves from the governments could help solve this issue. Energy taxes are as well in %, so we get higher VAT on taxes!"
Competition authorities in Sweden are investigating if prices are too high, while retailers have stated that some stores are facing bankruptcy with higher prices still not enough due to the increased costs they themselves face.
Horvath expects the prices of fresh produce will fall to somewhat normal levels now in spring as northern European production will increase rapidly.
For more information:
Peter Horvath
Svenska Odlarlaget
Tel.: +46 042 499 01 12
Email: Peter.horvath@svenskaodlarlaget.se
www.odlarlaget.se