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Helsinki leads in food price increases

A Helsinki survey by Yle Radio 1 has revealed a doubling of prices for food commodities such as coffee and sliced loaves in the ten years since Finland assumed the euro as its national currency.

Paahtoleipien valmistuslinja. Työntekijä valkoiset työvaatteet yllään.
Image: Yle

The price review showed that compared to 2002 when consumers began using euros, the kilogram price of coffee increased by more than five euros, while the price for one kilogram of sliced bread has gone up by one euro and fifty cents.

The shopping basket used in the Yle Radio survey included low-fat milk, eggs, margarine, coffee, sliced bread, cola beverage and dishwashing liquid.

Yle Radio also compared price changes in Helsinki with those of other European cities: Berlin, Paris and Rome. The comparison did not take account of different consumption patterns or changes in salaries, taxes or buying power.

The study showed that while the nominal price of the Helsinki food basket increased by more than ten euros, or 65 percent over ten years, the same shopping basket cost consumers seven euros more in Berlin (56 percent), just over six euros more in Paris (30 percent) and around four euros more in Rome (44 percent).

Coffee, sliced bread prices grow fastest

In Helsinki and the other European cities surveyed, the biggest price increases were seen in bread and coffee products.

Particularly in Finland, where coffee lovers typically drink twice as many cups per day as their central European counterparts, the higher prices bit deep into consumers’ wallets. With shoppers in Asia also developing a taste for java and driving prices up, investors have been able to speculate on the price of the morning pick-me-up.

The Yle team also found that the doubling of the cost of sliced bread was caused partly by speculation in wheat prices. However, it was also found that the price of wheat only accounts for a small percentage of the shelf price of bread.

Compared to ten years ago when the euro was launched, consumers are now paying 13 cents more for a litre of milk, or 18 percent more than in 2002 – a big pill to swallow for milk-loving Finns.

Margarine prices retreat

Margarine was the only product in the Helsinki shopping basket that offered consumers any respite from the price rise onslaught. Ten years ago, margarine was widely used for baking, but with butter reclaiming lost popularity, margarine is losing its lustre – and its priciness.

The Yle team found a great difference in consumption patterns between Finland and other euro countries. In Berlin, Paris and Rome consumers spend much of their time shopping in market places and halls, where vendors specialising in meat, fish, vegetables and baked goodies are part of everyday life. In Finland, the shopping experience is the territory of just a few players, and there is less variety.

Prices are also influenced by the fact that grain output in central Europe is roughly double that of Finland. Additionally, distances to market are shorter and populations larger, all putting downward pressure on prices. The value added tax on food items is also significantly lower in central Europe than in Finland. A one-percentage point increase in VAT due to come onstream in Finland in 2013 will widen that gap.

Petrol price approaching two euros

Ten years ago low octane petrol cost around one euro in all of the cities in the comparison. In Rome, the lowest price for pertrol came in at nearly two euros.

Depending on the country, the price increase for petrol has been anywhere from 40 to 80 percent over the past ten years.

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