The comparison of prices in relation to European markets (France, UK, Spain, Italy and Portugal) with and without the value of VAT, which differs from country to country
Lower compared to key European markets (France, England, Italy, Spain) in Greece the prices of a standard basket of products Super Market one householdbut higher than in Portugal, according to the conclusions of a study by the Consumer Goods Retail Research Institute (IELKA).
The IELKA study compares prices based on data from price comparison platforms in each country, but also on prices charged by supermarket chains in a typical basket of products of the household of the organized food retail trade (supermarket) in Greece, in September 2023 and respectively in France , in the UK, Spain, Italy and Portugal. It is noted that the price comparison is made with and without the value of VAT, which differs in each country.
In more detail, prices were compared in a total of 44 product categories and specifically 20 product subcategories that make up a typical shopping basket, as it has been shaped in this repeated survey from 2012 to the present. In addition, 19 product sub-categories joining the household basket from November 2022 and five additional product sub-categories joining the household basket from March 2023. These product sub-categories are examined from a significant sample of over 5,000 product prices and 30 different super chains markets in the six countries in total, to calculate the average prices with samples from valid price comparison sites in Greece and abroad, but also from supermarket chains. The data includes both prices of products on sale and private label products in each country.
In particular, the comparison of average basket prices shows that three European countries have a significantly more expensive average basket than Greece (18% France, 11% United Kingdom, 12% Italy), Spain is at the same level as Greece, while Portugal is 6% cheaper than Greece.
The picture of the results changes significantly when we remove the relevant VAT per country to understand the real prices of supermarket products. The comparison of the baskets in this case shows that European countries have a more expensive average basket than Greece, namely France by 26%, the United Kingdom by 20%, Italy by 20%, Spain by 7%, while Portugal remains cheaper by 5%.
This, according to IELKA, is a result of the difference that the low VAT has per country (this is the VAT referred to food and beverages). In Greece this VAT is 13%. VAT is significantly higher than the UK (0% or 5%) and France (10% and 5.5%), Spain (10% and 4%), Portugal (13% and 6%), Italy (5% and 4%), but also most EU countries. The main difference is that food which in Greece is subject to the high VAT rate with 24% in the rest of the countries is subject to the low VAT rate, which is also lower than the Greek with 6%, 5.5%, 4% or even 0%. It is noted that the effect of special consumption taxes (eg coffee) cannot be included in the above data.
In addition to VAT, factors that should be taken into account when comparing prices between different countries are:
-Natural disasters due to climate change
-The country’s distance from the production centers of central and western Europe and the corresponding costs
-The cost of energy and transport
-The complexity of the geography of each country (eg road network, islands etc.)
-The size of the market and corresponding economies of scale in product procurement
-The export-import balance in relation to food and raw materials for its manufacture
-The various production costs (energy, raw materials, wage costs, financial costs, bureaucracy)
-Productivity of industry and retail trade in each country
-Consumer habits and purchasing power in each country
-The amount of taxation in each country.
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