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When will food prices in Denmark return to normal?

An analyst in the Danish food sector says that current high food prices are probably here to stay for the time being.

Shoppers in Denmark
Shoppers in Denmark may have to wait some time to see food prices return to pre-2022 levels. File photo: Maria Albrechtsen Mortensen/Ritzau Scanpix

As well as electricity, petrol and gas, the price of food has climbed markedly in Denmark over the last 12 months.

Official data released earlier this week put inflation at its highest level for nearly 40 years, and supermarkets have increased prices on large numbers of products.

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Specific items like chicken and beef are reported to be undergoing drastic price increases, due in part to the increased cost of feed related to global supply disruptions and high energy costs.

According to Statistics Denmark, the price of food products has increased by 7.7 percent during the last year. That takes into account all products, with some therefore undergoing steeper increases than the average. Increases of over 15 percent were recorded for several products including milk, beef and pasta products.

The high price of food in Denmark could be here for the intermediate future – with two years a likely duration according to the sector director for food with the Confederation of Danish Industry (Dansk Industri, DI), Leif Nielsen.

“There are some completely natural things (causing the price rises) such as droughts in several parts of the world. That has given less production than we have been used to,” Nielsen told news wire Ritzau.

“There are also some political reasons. There is a war in Ukraine. That’s a huge agricultural country. They have not been able to export,” he said.

“Additionally, Ukraine has not been properly sowed. There will therefore be less seed and sunflower oil on the market next year,” he said.

Prior to the war, Ukraine, which had a population of 44 million, produced enough seed for 100 million according to Nielsen. That production has been roughly halved, the analyst said.

Meanwhile, some countries have taken the step of restricting exports in order to protect themselves from global prices increases.

For example, Hungary and Indonesia, which produce more wheat and sunflower oil respectively than they use, have limited or stopped exports to prevent competition. They thereby protect their own populations from inflation on those products.

“In return, prices increase in the rest of the world,” Nielsen said.

Drought, war, a loss of harvest in Ukraine and reduced trade are all factors which can draw out the path back to “normal” prices, he said.

“We probably need two or three years. That’s the experience from other crises,” he said.

He noted that the price of energy is a factor that could help to ease food prices in the more immediate future – should energy itself come down in price. That is due to energy being a major component in the cost of food production.

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TAXES

Danish government returns debt payments from 138,000 people 

Around 138,000 people in Denmark have been unable to repay debts to the Danish state in 2022 after money they paid was refunded.

Danish government returns debt payments from 138,000 people 

From January to October 2022, 138,000 people in Denmark trying to square their debts with the government were refused due to confusion about whether the Danish Debt Collection Agency (Gældsstyrelsen) actually has the right to receive it, newspaper Berlingske reports.

Having a debt to the Danish public sector on your books can have serious financial consequences, including jeopardizing your eligibility to secure a mortgage.

Data from the Debt Collection Agency indicate the number of debts considered “not ready for recovery” has increased by 1.5 million this year. Half of those debts are connected to the Danish Tax Authority (Skattestyrelsen). 

In total, the 138,000 people were refunded 121 million kroner, including 17 million kroner in unpaid interest. That works out at an average refund of 750 kroner per person.

Based on the scale of the problem, the government will have to consider cancelling some of the debts, Peter Bjerre Mortensen, professor of public administration at Aarhus University, tells Berlingske. 

“They need to swallow some very big camels and/or simplify some legislation or forgive some debts, because right now it seems that things are still going the wrong way with regard to collecting public debt,” Mortensen said. 

The issues with ‘unpayable’ debts first arose in 2015 when EFI, the IT system Skat used to collect debt, was shuttered, according to Berlingske.

Debts to the Danish state have been growing since then. The parliamentary ombudsman said earlier this week that he would try to find out why individuals have been unable to repay debts.

“The ombudsman has received complaints from several members of the public and there have been articles in the media about people who could not repay their debt to the state,” wrote the ombudsman, Niels Fenger.

Tax minister Jeppe Bruus has previously recognised the issue with the repayment system.

“This is a huge challenge and something that must be worked on and improved,” he told newspaper Jyllands-Posten in September.

READ MORE: ‘Topskat’: What is Denmark’s high income tax bracket? 

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