The Norwegian grocery chain Kiwi froze food prices, which helped lower inflation overall in February. However, economic expert Arturo Arques does not believe that a food price cap will reduce inflation in the long term. – We know from experience that this type of policy rarely works, he says. On February 1, most food chains in Norway raised prices by around 10 percent after new agreements were negotiated with suppliers. But the discount chain Kiwi decided instead to keep prices at the same level as before on all goods – something that surprised the market and caused inflation to decrease. Better use of consumer power However, a food price freeze will not be the solution to the inflation problem in Sweden, says Arturo Arques, private economist at Swedbank. – In the short term it can of course work, but the risk is that the prices will rush away once you let go of the price ceiling, he says. A greater success would be to put pressure on the food chains by using consumer power, he believes. – I think it is better that we as consumers are price conscious. By using discounts, you can put pressure on the food chains, and this can reduce food costs by between 20 and 30 percent. Swedish food prices rise most in the Nordics The price of food in Sweden rises most in the Nordics. In comparison with Denmark and Finland, the differences can largely be explained by the weak Swedish krona, which makes imported goods more expensive. At the same time, some believe that the krona cannot explain why food prices in Sweden have risen more than they have in Norway over the past year. According to Arturo Arques, it is not only about the weakening of the crown. – It is also about energy costs, capital costs and many other things that have risen for farmers and food chains. – The Swedish Competition Authority is now looking at how the food chains set their prices. But one thing is certain, we can count on food prices to increase. Hear more from Arturo Arques in the player above.
t4-general
This is how the Norwegian food chain got inflation to decrease – but the Swedish expert saw
