Lithuania's food prices fall over past year despite EU's highest inflation

Food prices in Lithuania have fallen over the past year, even though the country recorded the European Union's highest annual inflation rate in October. Shoppers, however, do not believe the figures, as more expensive fuel, electricity and heating weigh on household budgets.

At the market in Kaunas, shoppers said everyday groceries were becoming hard to afford. One resident said she mainly buys chicken for her children, along with dairy and bread, and sees prices rising. Another said pensioners have to watch every expense as energy costs climb. Vendors gave mixed assessments: some said prices had edged up, others that they had been unchanged for about a year. They also warned that prices could rise as fuel, electricity and other production costs increase.

What the data show

Agricultural Data Centre figures show supermarket food prices were lower in September than in August. Evaldas Stankevčius, associate professor at the Faculty of Economics and Business of Kaunas University of Technology, said the average annual decrease is 7.4%. He explained that prices vary widely between products: chicken overall became 0.5% more expensive, chicken breast rose 20%, and various cuts of pork fell by 20–30%, while beef has been getting gradually dearer. The State Data Agency reports a fall of more than 1.5%; the gap reflects different calculation methodologies.

Price comparison portal Pricer.lt says products from major brands became 7.2% cheaper over the year. Its founder, Arūnas Vizickas, linked this to changes in supermarket pricing strategies and stronger competition: the largest retail chain cut its so-called regular prices significantly, with the biggest reductions in branded goods. Butter fell the most, by 40%, and sugar and meat are also cheaper. Retailers find it hard to pass on higher costs, so the burden may fall more on suppliers.

Outlook and government plans

Economists acknowledge some products have become slightly more expensive but expect no major price rises soon, barring major geopolitical or political developments or extreme weather.

Agriculture Minister Kęstutis Mažeika said the government plans to finish calculating the components of milk prices by the end of the year. The results will underpin legislative amendments expected in the spring parliamentary session. The retailer's share will most likely be included, meaning practically the entire supply chain would be monitored. A similar approach is being considered for other products, including meat and bread.