Costco to Open Iceland Branch in 2016 Skip to content

Costco to Open Iceland Branch in 2016

Costco plans to open its first Iceland branch in the summer of 2016. Company representatives are expected to sign a sales contract on Friday for a 14,000 m2 (150,695 ft2) facility at Kauptún, in Garðabær, Morgunblaðið reports.

Plans have also been made for an adjacent self-service gas station, and charging cables for electric cars will be made available.

Costco is a warehouse club, or wholesale store, which sells items at bulk prices, and in turn requires shoppers to be club members and pay an annual fee. They currently have stores in two other European countries, Great Britain and Spain.

As reported last summer, when Costco first made public their plans to open an Icelandic branch, strict labeling laws on food products in Iceland were expected to be a hindrance to the import of many American products.

Some of these regulations are a part of European Union agreements, which Iceland has signed on to as a member of European Free Trade Association (EFTA), and therefore party to the European Economic Area (EEA).

Thus they presented an obstacle impossible to overstep by legislative means—a proposed course of action also opposed by many Icelanders as a perceived breach of laws concerning fair competition.

“In my opinion a new store opening in Reykjavík, whether it is American or not, must abide by Icelandic law. It isn’t okay to bend the rules just for them,” said Guðrún Hafsteinsdóttir, Head of the Federation of Icelandic Industries, last summer, when the idea of the proposed store was first announced.

In light of this, Costco’s subsidiary company, Costco Wholesale United Kingdom Ltd—which must abide by the same European regulations on food products—has taken over the food import scheme for the new store in Iceland.

Last fall the EFTA Surveillance Authority then ruled that Icelandic restrictions on the import of fresh meat products were in violation of the EEA Agreement. Court proceedings are currently underway and Costco plans to wait for the results before deciding on any course of action.

Guðmundur Ingvi Sigurðsson, Costco’s Icelandic attorney, says that company representatives are similarly waiting to see how proposed legislation, permitting the sale of alcohol by certified private agents, fares in parliament.

Costco is then expected to take advantage of Iceland’s free trade agreement with China.

“They are looking more closely at [China], but are generally putting their efforts towards analyzing how to bring the most competitive prices to Iceland. They have a great and extensive team working on that, and getting products to the country by the most economical means is a priority,” said Guðmundur in an interview with Morgunblaðið earlier this year.

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