Grocery stores in Sweden may have taken the opportunity to raise their prices “unreasonably” a lot in times of pandemic and high inflation. This shows several parallel analyzes carried out by the Swedish Competition Authority – on behalf of the government.
– We are already seeing indications that point to a risk of a lack of competition, says Rikard Jermsten, Director General, Competition Authority.
On behalf of the government, the Swedish Competition Authority is currently carrying out a review of the food market. The reason is the government’s concern that grocery stores have raised their prices in an unjustified way, thereby fueling inflation.
In a number of parallel analyses, via its calculation models, the agency has, at an early stage, been able to establish that there is a high risk that the industry’s weak competition has led to “unjustified price increases”.
– We will also continue to follow the money in selected product groups in order to identify unjustified price increases if possible, says Rikard Jermsten.
Hard-motivated eggs revealed greedy traders
According to the agency’s early calculations, certain goods stand out as clear examples where motives for price increases are difficult to find. One of the products is eggs.
– We have seen a price increase of 30 percent for eggs in the last year. Eggs are an important input, not only for consumers but for those who produce different foods, so that is one reason why we chose to look at eggs, says Leif Nordqvist, project manager at the Swedish Competition Authority.
According to the analyses, the increased egg prices are not due to increased transport prices, but the money ends up in the shop owners’ pockets, according to the agency.
– The money has then ended up in the grocery store, so the prices of eggs have risen more than the grocery store’s purchasing costs for eggs have done, he says.
More reports to come
A cynical phenomenon that, according to Nordqvist, is called “egg inflation” – when consumers’ wallets run out, they choose meat for the cheaper protein egg. Then the stores have simply raised the price.
– It could be due to egg inflation, which I find interesting. As many households are affected by higher food prices, consumers act rationally. For example, by buying less red meat, but more eggs. So consumers have bought more eggs, despite the rising prices, he says.
The Swedish Competition Authority’s work to shed light on whether there are competition problems in the food industry is carried out in certain parts in collaboration with the Norwegian Economic Institute.
The results of the ongoing survey will be presented continuously during the year.