Why is food becoming more expensive in Denmark?

The effects of high energy prices are not just being felt on petrol station forecourts and electricity bills in Denmark, with the prices of many products at supermarkets also up.

supermarket check out
Prices at Danish supermarkets have gone up measurably over the last 12 months. Photo: Signe Goldmann/Ritzau Scanpix

Pasta, butter and other food products are among those to have become notably pricier in supermarkets, according to new analysis by Statistics Denmark.

The agency said that the price of foods has gone up by 5.7 percent during the last year.

Food production has become more expensive due to high energy prices and global shortages of certain products, according to an analyst.

“Food producers use a lot of heat and fuel to produce their foods. The price of food is therefore very dependent on energy prices,” consumer economist Ida Marie Moesby of bank Nordea said to news wire Ritzau.

“Another explanation is that there are global shortages due to the coronavirus crisis. Lockdowns meant that some producers could not grow and transport their goods. That particularly impacted the price of cooking oils,” she said.

The price of cooking oils has gone up by 20 percent in the last year, according to Statistics Denmark.

According to the agency, higher prices mean that a household with a monthly food budget of 3,000 kroner in February 2021 must now pay an extra 171 kroner to purchase the same products.

This is making consumers think more carefully about what they buy, Moesby said.

“Consumers are looking for alternatives but price increases are difficult to avoid because they are general and have affected very many products,” she said.

There are no signs that prices will fall again in the near future, the economist warned.

“As the situation looks now with the war in Ukraine, there is an awful lot that suggests that these price increases will continue. But it really depends on how the war develops,” she said.

Recent years have seen periods in which food prices have fallen measurably. Not since 2008 has the rate of food price increases been higher than today, Ritzau writes.

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Danish supermarket chains introduce price limits on selected products

Danish company Salling, which owns three supermarket chains, will place a limit on the price of selected products until later this year in response to inflation.

Danish supermarket chains introduce price limits on selected products

The high current prices of energy and many daily items for customers, caused by inflation, are behind Salling’s decision to introduce a price limit on some of its products, the company said in a statement on Tuesday.

Salling owns the Netto, Bilka and Føtex supermarket chains in Denmark. The prize freezes will apply at all three.

The limits, which will be in place until October, will be applied to “basic daily and food items”, according to Salling. Netto stores will see price limits applied to 100 products, while the larger Føtex and Bilka stores will have 200 products included.

Own-brand Salling products are likely to form the bulk of the lists, but the specific products were not named by the company.

The prices of the selected products “will not increase before October 28th despite ongoing, increasing inflation,” Salling said.

Although Salling expects inflation to continue, it said it wanted to give customers the option of preventing their spending on groceries from increasing by enabling them to choose products that have not gone up in price.

“We will make it easy for customers to navigate the products by communicationg prices clearly in our stores using signs and markings on shelves,” Salling CEO Per Bank said in the statement.

The move was described by Salling in the statement as an “investment” in light of expected higher costs at suppliers.

“It is just a year since Danes bought luxury items and flocked to supermarkets as a result of corona lockdowns and with extra holiday money in their pockets. Today, customers navigate by special offers and own brands as an alternative to name brands in Salling’s shops and stores,” the company said.

The company will announce on November 1st whether it will extend the limitation period, it said.