Swedish Food Prices Lower Than Neighbors Despite Rising Costs and Upcoming VAT Cut

Recent analyses reveal that food prices in Sweden remain lower than in neighboring countries such as Denmark, Finland, and Norway, despite notable price increases between 2022 and 2025. According to a report prepared by economist Lars Jagrén, food prices in Sweden have risen by 30.7% in this period, slightly above the EU average increase of 29.1%, though when adjusted to euros, the rise is a lower 24%. This increase is partly due to the weakening of the Swedish krona, which has made food imports more costly, as many products are imported into Sweden.

Despite these upward pressures, Sweden's food prices are still affordable relative to the overall economic price level and remain lower than those in its neighboring countries, according to reports from both Livsmedelsföretagen and Lantbruksnytt. Nonetheless, Swedish food prices are about 7% higher than the EU average, reflecting the complex dynamics in the market.

The Swedish food industry is currently under financial strain, with profitability among the lowest in the EU. Carl Eckerdal, chief economist at Livsmedelsföretagen, noted that Swedish food producers have been absorbing costs and reducing margins to keep prices down, but highlighted this approach is unsustainable in the long term. He emphasized the importance of examining the entire food supply chain's cost developments as the government has announced that a food price commission will begin its work to analyze price trends.

A significant policy shift looms with the announced reduction in the value-added tax (VAT) on food from 12% to 6%, effective April 1, 2026. This move has spurred considerable public debate and is expected to be a pivotal issue in the forthcoming election.

Björn Hellman, CEO of Livsmedelsföretagen, expressed hope that political discourse will move toward constructive debates on building a competitive and resilient food sector that sustains jobs and welfare, rather than assigning blame. Eckerdal welcomed the VAT reduction but cautioned it will not alleviate producers’ rising costs.

As Sweden prepares for the VAT cut and the food price commission’s findings, the balance between keeping food affordable for consumers and ensuring sustainable profitability for producers remains a critical challenge in the Swedish food sector.