The same cone of ice cream, made in Lithuania, costs almost double here than in Latvia. While the retailer says it has to do with different costs in each country, could it actually be a case of greedflation?
Paulius from Lithuania was shopping in a Rimi supermarket in Latvia and found an ice-cream brand he recognised, Baltija. The price was 1.59 euro.
“In Lithuania, this ice-cream is much more expensive,” Paulius told LRT.lt.
In the same supermarket chain in Lithuania, a cone of Baltija ice-cream is indeed priced at 2.49. It has the same price tag in other chains: Maxima and Iki.
In a comment to LRT.lt, Rimi said the difference in price had to do with different costs in Lithuania and Latvia.
“The price of goods is influenced by many different factors – different markets have different costs, such as the wage basket, energy resources, the cost of renting premises, the cost of maintaining stores and other factors,” the supermarket chain said in a written statement.
However, there may be other factors, says Petras Čepkauskas of Pricer.lt, a price comparison platform.
“There are a few things Rimi doesn’t talk about. First, there is the behaviour of Lithuanian producers who make their money in the home market because the brand is better-known and they maximise their earnings here. The second thing is that in a foreign market they have to fight with local ice cream brands,” Čepkauskas says. “Our producers do this often.”
According to statistics by the State Data Agency, he notes, during last year’s price hikes, Lithuanian producers raised their prices in foreign markets by about 10 percent, while in Lithuania the prices grew 35 percent.
Another factor, Čepkauskas adds, is that Rimi itself is facing tougher competition in Latvia, which leads the supermarket to engage in “more aggressive pricing”.
It is not uncommon that Lithuanian goods are cheaper in foreign markets, he says.
“Yes, you can say from the economic point of view that in Lithuania they have invested in the brand and now they want to get a return. But considering that in Lithuania the prices of foodstuffs have been rising almost the most in the EU, and raw materials are now falling, this is elementary profiteering and an unwillingness to reduce prices for the Lithuanian consumer,” Čepkauskas concludes.
Baltija ice cream is produced by UAB Unilever Lietuva Ledų gamyba (founded in 1992 under the name Ingman Vega), which became part of the Unilever Group in 2011.
LRT.lt has contacted the company for comment.
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