New pay deals forcing up food prices

Reports suggest that recent new collective wage agreements in Iceland are already forcing up food prices.

The supermarket chain Krónan, for instance, has received several announcements from wholesalers and suppliers detailing price rises of 2-10%. This extra purchasing cost for the supermarket comes on top of the higher wages to be paid to staff under the new wage agreements.

“Price rises from producers and suppliers usually affect prices on the shelf,” says Jón Björns­son, CEO of Kaupás, the company which owns and runs Krónan supermarkets. “Food retail cannot simultaneously take on higher wage costs and higher cost prices. We intend to try and streamline operations and do everything in our power to keep prices stable.”

More price rises ahead

The Consumers’ Association of Iceland has compiled a list of supplier and wholesaler price rises since 1 May. New wage agreements appear to be just one factor pushing prices up. Another is general price rises on the international market.

Among the upcoming prices rises attributed to the new pay deals are:

• Meat (+2-3%, from 22 June)
• Sandwiches, pizzas, salads and meatballs (+3-6%, from 22 June)
• Fish products (+5.8%, from 1 July)