Coop completes Prisma store acquisition in Estonia, rules out price hikes

Coop Eesti Keskühistu is set to finalise the acquisition of Prisma Peremarket's stores in Estonia at the end of August, with all former Prisma outlets expected to operate under the Coop brand by November. Company representative Rainer Rohtla confirmed that a purchase agreement has been signed and the Competition Authority has approved the transaction. The takeover will take place on August 31, after which Coop Eesti Keskühistu will become the sole owner of Prisma Peremarket.

During the second or third week of September, the existing Prisma stores will be handed over to various Coop regional cooperatives, which will begin operating them. Rohtla said the aim is to preserve the assortment customers are used to, although this requires significant effort. Prisma's range is distinctive, featuring many Scandinavian products and Coop private-label items not currently available in Coop stores. To keep the full range, logistics and supply chain capacity will need to be expanded. Nothing will be removed, but popular Coop products will be added. Prisma's best-selling items will be rolled out to other Coop stores across Estonia by July next year.

Rohtla dismissed fears of price increases, citing intense competition in Estonia's retail sector, already high food prices and weak consumer purchasing power. One goal of the acquisition is to grow Coop's market share. Currently, Coop holds around 5% of the Tallinn market and 23% nationwide; after the deal, its Tallinn share will rise to 17%.

Economist Raul Eamets agreed that a larger market share for one chain does not automatically lead to higher prices. The grocery market is highly competitive, especially since Lidl entered a few years ago. Major chains' profit margins are only a few percent of sales, so dominant players cannot easily manipulate prices. Eamets added that food prices in Estonia are driven mainly by global factors, with imported goods prices up 7%. The country cannot feed itself fully and depends heavily on imports, leaving little room to influence price levels.

The value of the transaction has not been disclosed. In April, Coop Eesti Keskühistu and Finnish retail group SOK signed an agreement for the purchase of AS Prisma Peremarket and its 13 stores in Tallinn, Harju County, Tartu, Narva and Rapla. The parties also agreed to a strategic partnership to bring Finnish food and consumer goods to more than 300 Coop stores. The deal excludes the Prisma brand and Sokos Hotel Viru.