Finland's High Food Prices Due to High VAT
Image: YLE
Finns paid about 15 percent more on average for food last December compared to citizens of the other founding EU member states. The main reason for the price differences was Finland's higher value-added tax (VAT), according to a fresh study by the Research Institute of the Finnish Economy (ETLA).
ETLA says that weak competition in agricultural production also plays a role in the high prices. Such challenges include small farming areas and expensive growing conditions.
However, Finland's food industry and grocery stores are quite competitive internationally. Production by the Finnish food industry is ranked higher than in the other 14 original EU countries and is close to the level seen in the United States.
Researchers say that strong competition is needed in order to help facilitate foreign and domestic companies’ goods to market. They add that the opportunity for small producers to get their goods to market would improve competition and consumer choices.
The study was commissioned by the Ministry of Employment and the Economy.
YLE