Consequences of the EU membership on food prices and food consumption in Finland

Nimekkeen selvennys: EU-jäsenyyden vaikutus elintarvikkeiden hintoihin ja kulutukseen.

The EU membership from the beginning of 1995 affected the food market in Finland in a number of ways: prices decreased, price ratios changed, and the choice increased in size and variation. From September 1994 to January 1996, food prices decreased by 7%. Coffee and alcoholic drinks were the most important exceptions when it comes to recent price developments. Consequently, when examining food excluding beverages and coffee, the decrease of prices was 12%. In 1995, the price of flour, beef, pork, fresh fish, and margarine decreased by one-quarter, the price of eggs even more than that. The prices of liquid milk and ice-cream did not react to the membership. After the price reductions, food is cheaper in Finland than in Germany. In meat products, the difference is 2-15%, in dairy products 2-22%, and in eggs 26%. Fruit is cheaper in Finland, whereas vegetables, vegetable oil, sugar, and alcoholic drinks are cheaper in Germany. In 1995, the consumption of pork, poultry, and beef increased by 12%, 12%, and 2%, respectively. The consumption patterns changed in favour of high quality parts, while the consumption of sausages decreased. The consumption of fresh milk, sour milk, and butter followed the long trend decreasing by 2-4%. An exception within liquid milk was yoghurt: as a result of price competition and heavy promotion, the consumption increased by 18%. The cheese consumption followed the trend and increased by 4%. The 38% fall in egg price resulted a 9% increase in consumption. The EU membership liberalised the food trade in Finland. In 1995, 7% of the consumed meat was imported. Within dairy products, the domestic suppliers kept a 99% market share in liquid milk, 92% in cheese, and 100% in butter. In margarine, 8% of consumption was imported. The imported food took smaller market shares than expected. On the other hand, the imports caused strong fall in consumer prices that decreased the profitability of domestic food manufacturing.

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MTT Taloustutkimus (MTTL)