Retailer markups not euro to blame for price hikes – Lithuanian PM

The Lithuanian government held a meeting on Monday to discuss growing prices that have irked consumers.

The reasons for more expensive food products in supermarkets also include a poor harvest and a lack of competition in the retail market, but not the adoption of the euro, Butkevičius insisted on Monday.

“We have drawn some conclusions from the price dynamics of certain food products, especially fruit and vegetables. Statistics suggest that over the first quarter of this year, compared to the same period last year, the prices of frozen seafood, frozen fish as well as some vegetables and fruit grew the most. The latter are about 10% more expensive. Prices of some items grew even more, onions, for instance, by 70%, peppers by 35%, garlic by 40%. Meanwhile Lithuanian-made meat product and dairies got slightly cheaper,” Butkevičius told reporters.

“I can tell you confidently that it has nothing to do with the euro,” he added. “Most of these products are imported from eurozone countries, therefore price changes are down to other reasons than the new currency: developments in the market, poor harvest and so on.”

He also said after the meeting, which included government officials and retailer representatives, that turnover at Lithuania’s five biggest supermarket chains grew by one tenth compared to last year and that retailers increased their markups.

“Judging by the available data, markups this quarter could be higher than during the same period last year,” Butkevičius said.

As a result, the Tax Inspectorate and the Competition Council have been instructed to monitor the situation in the market, the prime minister said.

Šarūnas Keserauskas, chairman of the competition watchdog, confirmed that the institution will investigate retailers’ pricing policies to see if there are no illegal trust agreements. However, the investigation will not be public and might take some time to produce results.

Laurynas Vilimas, president of the Lithuanian Traders Association, told reporters he had no data about retailers’ markups, which are confidential. He added that competition in the Lithuanian market is intense enough to hold prices down and that increases have to do with seasonal fluctuations and harvests.