Price level for consumer goods and services, 2006

The level of prices for food and non-alcoholic beverages in Iceland and Norway is 64 and 58 per cent above the average in EU-27, followed by Denmark and Switzerland, which are 42 per cent above average. Sweden and Finland are 20 per cent above average. This means that in Denmark, food and non-alcoholic beverages are about 10 per cent cheaper than in Norway. Furthermore, prices in Sweden and Finland are about 25 per cent lower than in Norway. A possible explanation for the Norwegian result, is that we have a high general level of income and costs, a characteristic that often correlates with high price level.

Differences between east and west in Europe

At the bottom end of the table, the Former Yugoslavian Republic of Macedonia (FYROM) and Bulgaria stand out, both with a price level 44 per cent below the EU-27, or about one third of the Norwegian level. Generally the survey reveals a significant difference in price levels between the "old" western EU countries and the "new" eastern members. The latter have a considerably lower price level for food and non-alcoholic beverages.

Meat prices particularly high

Norwegian prices are clearly above European average for all sub-groups in the survey, but the sub-group "meat" has the highest prices in relative terms (82 per cent above the EU-27 average). Norwegian prices for fruits and vegetables (43 per cent above) and fish (28 per cent above) are closer to the EU average.

Norwegian tobacco prices clearly stand out in the survey (127 per cent above the EU-27 average), and are about twice as high as in Sweden and Denmark. Only the United Kingdom is more or less on the same level as Norway. Latvia and Lithuania have particularly low tobacco prices, about 70 per cent below the EU-27 average. Norway is also found on the top for the sub-group alcoholic beverages (129 per cent above the EU-27 average) together with Iceland. Compared to Norway, prices for alcoholic beverages in Finland, Sweden and Denmark are respectively 26, 37 and 44 per cent lower. Turkey, which normally in consumer price surveys has a low price level, has remarkably high prices for alcoholic beverages.

Price convergence for Europe

The most striking result of the 2006-survey is a general convergence of prices among the 27 member states. In particular, we observe a strong convergence for the sub-groups oils and fat, fruits and vegetables, other food (among other things; baby-food, spices, sauces and soups) and non-alcoholic beverages.

Tables:

• Table 1 Price level indices for food, beverages and tobacco. 2006. EU27=100