When lack of competition makes you go hungry and other food whines

We’ve all heard the supposed reasons behind the increasing food prices; rising fuel and other costs, failed crops and all that. Some of them are downright lies and the others are becoming increasingly dubious as over the past 6-12 months the prices of energy and commodities have fallen quite significantly. As such, all or most of these reasons have become to resemble excuses. If the reasons behind the rising costs disappear, one would – naively, perhaps – imagine that prices would come down.

That logic may work elsewhere, but not in Finland.

Curiously enough, food prices in Finland continue to rise at much higher rates than pretty much anywhere else. In 2008 food prices rose by 10,7% in Finland – a higher rate than any other European country with the exception of Iceland. What’s more, while food prices have recently started decreasing in some countries, food prices in Finland still rose by (what I hope is annualized, the story doesn’t say) an incredible 7% in January of 2009. As an example comparison elsewhere, in the U.S. the food price inflation is currently running at an annualized pace of 1.4%.

Therefore it’s not very surprising that Martti Luukko from The Finnish Consumers’ Association comments ever-so-carefully (translation mine) that:

– Onko nyt jotenkin niin, että kilpailu ei toimisi ihan täydellä teholla, Luukko kysyy.

– Could it somehow be so that competition is not working at full power, Luukko questions.

“Could it somehow” my @$$! Ahh, the beauty of an oligopoly – the story of Finland in so many other areas as well. I have no doubt that there are people even in Finland who go hungry because of this.

Since I’m on a food-related rant here, there are two other issues that tick me off:

Here’s some cheaper food – only you can’t buy any!

    There actually are places in Finland where you can find semi-reasonably priced groceries. These are the cash-and-carry wholesalers which there are a few of, but the catch is that for some inexplicable reason, they are off-limits to normal consumers.
    I really, really cannot come up with a good reason why this is so so could someone tell me why such idiotic rules are in place?

When the economy packs save money only for the merchant

    One of my pet peeves when grocery shopping in normal stores are so-called economy packs. Of many products, there are economy packs available – i.e. larger amounts of the same stuff. Supposedly these are cheaper per unit (liter, roll, kg, whatever) – but the annoying fact is that the so-called economy packs are cheaper per unit in maybe only 50% of the cases. Half the time the stuff in the bigger package, though cheaper per unit to produce and to sell, is more expensive to the consumer.

    That’s just deceitful.


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