Politicians and retailers quarrel over high retail prices Skip to content

Politicians and retailers quarrel over high retail prices

Icelandic National Broadcasting Service, RÚV, reports that the minister of agriculture, Gudni Ágústsson of the Progressive Party, had called on the Competition Authority to monitor the lack of competition in the Icelandic retail sector rather than interfere with the management of Icelandic agriculture. He doubts that market dominant retailers refrain from “taking advantage of their position”, and he thinks any attention that the Competition Authority pays to tariffs and subsidies in agriculture is “misdirected.” He has complete faith in his own ability to run the Icelandic agricultural sector, said RÚV.

The minister of trade, Valgerdur Sverrisdóttir of the Progressive Party, says high food prices are “bad news” and is caused by “multiple factors”.

The foreign minister, Geir Haarde of the Independence Party, says that Icelandic agriculture must prepare for increased competition. According to RÚV, Geir is currently attending the ministerial meeting of the World Trade Organization.

RÚV also quotes the managing director of the Icelandic union Alþýdusamandid saying that tariffs and subsidies in agriculture are a hindrance to competition and lead to increase in product prices.

The managing director of Kaupás, an Icelandic retailer claimed that Baugur has a 55% share on the retail market while Kaupás has only 25%. He said that suppliers were afraid of Baugur and said it was unreasonable that Kaupás had to buy ads in media controlled by Baugur.

The managing director of Baugur subsidiary Hagar refused to comment on Kaupás’s allegations about Baugur systematically selling products below cost in infringement of competition law and said the claims about Baugur’s 55% market share were “wrong”. He said it was “ridiculous” to attribute high prices to Baugur market share. High prices were caused by high costs of agricultural products and high tax rates and it was up to the government to change both.

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