Nation’s high consumer price levels set off debate

Chamber of Commerce argues that report showing Denmark’s groceries to be twice as expensive as Sweden’s is “worthless”, while consumer advocacy group says politicians need to act on high prices

The Danish Chamber of Commerce says that an investigative report last week by freesheet 24timer is bogus. The paper ran a front page story alleging that a trolley full of groceries cost half as much in Sweden as it does in Denmark. The Chamber called the paper’s conclusions “worthless”.

The 24timer analysis compared prices between Bilka in Denmark and the Swedish warehouse store Gekås.

“The prices they reported have nothing to do with actual price differences between Denmark and Sweden,” Geert Laier Christensen, an analyst with the chamber, said. “They chose random goods from a very specific shop 200 kilometres from Copenhagen.”

Christensen said that a report from the Nielsen Institute shows that when measured over six months, the price for everyday groceries in Denmark is actually lower than in Sweden.

“If you compare real prices, sales and selection, you get a completely different result than just randomly choosing products,” he said.

Henrik Hyltoft, the Chamber’s marketing director, said that 24timer was engaged in questionable journalism.

“Stories like those 24timer has published the last few days cause irritation and confusion in the industry,” Henrik Hyltoft, the chamber’s marketing director, told The Copenhagen Post. “The Danish media should not be engaging in this kind of bottom-of-the-barrel journalism.”

Martin Salamon, from the consumer advocacy organisation ForbrugerrÃ¥det, however, disagreed with the chamber’s conclusions.

“Consumer prices in Denmark are too high and politicians need to address the problem,” Salamon said on the organisationÂ’s website. “Consumers can also effect quality and prices by ‘voting with their DankortÂ’. If they continue shopping at places charging high prices for poor quality goods, things will not improve.”

Higher taxes and wages are often cited as being causes of higher prices in Denmark.

Rasmus Kjeldahl, ForbrugerrÃ¥det’s director, said that higher costs are only part of the problem and that the greater issue is a lack of competition in the Danish marketplace.

“We have heard the supermarket’s explanation about taxes and fees time after time, but it simply does not work any more as the only explanation for the high prices in Denmark,” Kjeldahl told 24timer.

Kjedahl said his group was confused by the lack of interest on the part of politicians in what he sees as a serious problem.

“We are talking about  a lot of money, and it would be good for everyone if there was more competition.”

Per Østergaard Jacobsen, a consumer lecturer at Copenhagen Business School, agreed that grocery prices are too high in Denmark and pointed to the massive amount that supermarkets pay for advertising as a big part of the reason.

“Retail marketing in Denmark has increased significantly over the past five years,”  Jacobsen told 24timer. ” They send out significantly more flyers.”

Jacobsen said that suppliers spend seven billion kroner annually for flyers and other ad campaigns for supermarkets, and those costs are paid for by consumers.

Suppliers also finance millions of kroner worth of discounts offered to supermarket chains on items like computers and CDs by raising the price on groceries and other daily necessities.

Statistics from the European Union’s Eurostat show that grocery prices in Denmark are not only higher than those in Sweden, they are the highest in the entire EU.

The idea that it costs less to shop in Sweden is not a new one. Some will recall the online shopping website prissmart.dk that appeared in 2009 promising to deliver goods “at Swedish prices” to customers throughout Denmark. The company purchased products at lower prices in Sweden and trucked them into Denmark. Danish supermarkets questioned the legality of the enterprise and customers complained about poor quality and service. The company apparently shut down early in 2010 and their website no longer exists.