This is a study where a comparison has been made re food-prices in the BAltic countries.

1. Institute for Private Finances, Swedbank
Food basket study
in Baltic countries
27 February 2013
In Baltic household expenditure structure Study results reveal monthly food costs for a
expenses for food and non-alcoholic beverages household of a four-member family, identify
significantly exceed EU average 1 as well as are expense drivers in food basket and reveal impact
the largest group of expenditures in Baltic of available food discounts on household
households. expense. Study is a valid reference for
households to compare their actual expenses for
In order to have a reliable and comparable food against basket costs and identify areas for
benchmark for evaluation of household cost of money savings without compromising nutritional
food in all three Baltic countries, Baltic Institutes value of their food intake. Study could also
for Private Finances, Swedbank, developed a introduce new perspectives for more sustainable
study of food basket costs. Study includes food consumption in households for example
defining a recommended food basket, which decreased food waste and savings thereof.
ensures a balanced diet for individuals, tailored to
the consumption patterns of Baltic inhabitants. Study contains reference to national household
average income, revealing proportion of income
supposedly allocated to food to ensure balanced
nutrition of the family. To compare some aspects
of cost of living in three Baltic countries, data
comparison is available in the study.
1
Analysis of EU-27 household final consumption
expenditure, the EU Statistical Office Eurostat 2013
Institute for Private Finances, Swedbank 1

2. Findings
After comparing the food prices of Estonia,
The cost of an optimal food basket for a four- Latvia and Lithuania, the largest differences
person family in Lithuania amounts to EUR were found in dairy products, meanwhile the
280, in Estonia EUR 304, and in Latvia EUR minimum differences were in the category of
319 per month. fruits. The highest price for an estimated food
basket consisting of dairy products and fruits,
Based on a wage gap evaluation, the lowest as well as bread and cereals, vegetables and
burden of food expenditures is in Estonia, other products (coffee, tea, sugar, salt, etc.)
where 2 adults, receiving an average wage, would be paid in Latvia. The cost of
can allocate up to 22% of their income for an recommended meat and fish products would
optimal food basket compiled for a four- be the highest for consumers in Estonia.
person family. In Lithuania this part of
expenditure for food is 29%, and in Latvia Although the highest cost of the estimated
32%. food basket is in Latvia, Latvians may also
have the best opportunities to save, if
Food in Latvia is more expensive than in shoppers take advantage of promotions and
Estonia and Lithuania. The optimum discounts in stores. If a family in Latvia
estimated food basket for a family per month purchases products on discount, they would
in Latvia costs 14% more than in Lithuania, save 14% of the money available for the
and 5 % more than in Estonia. estimated food basket. A Lithuanian family
could save 8% of the money available for
Products in the protein group, i.e. meat, fish, food, meanwhile average savings in Estonia
dry beans, nuts, etc. take the biggest would amount to 3% of the money available
proportion, with more than one-third of the for the food basket.
food basket in each Baltic country. The
remaining part of food basket costs (dairy,
bread and cereals, vegetables, fruits, fats and
other products) is distributed on a relatively
even basis.
Institute for Private Finances, Swedbank 2

3. Study methodology
Information on study
In order to undertake a study of the Baltics’ food Products were grouped based on the product
basket and to evaluate food prices in Estonia, classification model which was developed in
Latvia and Lithuania, Baltic Institutes for Private accordance with the recommendations for healthy
Finances, Swedbank, developed research eating of the United States Department of
methodology that enables the comparison of Agriculture. Based on this model, food is
indicators between the three countries. classified into six groups – fruits, vegetables,
grains, proteins, dairy products and fats.
An estimated food basket was compiled in
accordance with the methodology of the Estonian Households and Calories Consumed by
Society of Nutritional Sciences, which is Household Members
recommended by nutritional experts and is Household – one person living separately or a
consistent with health nutrition principles. group of people who live in a common main
Necessary amounts of food were recalculated dwelling and share joint financial and/or food
based on energy needs according to the Swedish resources. Family or marital connections between
National Food Agency. In conclusion, an average members of such household are optional.
monthly cost for a food basket was calculated,
after research company AC Nielsen Baltics, had In terms of this study, a household consists of two
collected prices for food basket products in stores adults and two children: grown up male and
of Estonia, Latvia and Lithuania. Results female with preschool boy and teenage girl.
disclosed that food prices in the Baltics are
different. Different age groups and genders have different
energy needs. In order to calculate the calorie
Food Basket intake of a household, the calorie intake of one
The study was conducted using a recommended person multiplied by the number of members in a
estimated food basket which was worked out household is insufficient, as, for example, a child
based on the methodology of the Estonian or an adult woman will consume fewer calories
Society of Nutritional Sciences, which belongs to than an adult man.
International Union of Nutritional Sciences.
For these reasons the recommended amount of
The food basket consists of food items used in calories for households was determined in
home cooking. Those food items ensure the accordance to the Swedish National Food
generally daily needs of an adult for nutrients, Agency. Based on this, a man and woman
vitamins and minerals without causing health between the ages of 31 and 60 should consume
problems, and correspond to the daily nutritional respectively 2,700 kcal and 2,150 kcal per day, a
habits of people from Baltic countries. The diurnal boy between the ages of 4 and 6 and a girl
energy value of the estimated food basket is between the ages of 11 and 14 should consume
2,400 kcal. respectively 1,700 kcal and 2,000 kcal per day.
The energy need increases with more physical
In accordance with this estimated food basket, an activity or regular exercise.
adult should consume meat – 4.5 kg, fish – 2.9
kg, vegetables – 25.1 kg, fruits – 7.3 kg, and etc.
per month.
Institute for Private Finances, Swedbank 3

4. Data Collection following chain stores: Vilnius – Maxima, Rimi, Iki,
Commissioned by Institute for Private Finances, Cento, Aibė, Kubas; Ryga – Rimi, Supernetto,
Swedbank, AC Nielsen Baltics collected data on Maxima, Mego, Elvi, Iki; Tallinn – Rimi,
recommended food basket product regular prices Säästumarket, Selver, Maxima, Prisma,
from 14th till 20th of January, 2013. Maksimarket.
Shelf price collected in chain stores in every After collecting the prices of the most popular
capital of the Baltic countries, where overall products within the indicated group, the average
market share of each country exceeds 75%. price was calculated and the resulting amount
Prices are therefore representative of the whole used to calculate the study results.
country. Regular shelf price collected in the
Institute for Private Finances, Swedbank 4

5. Study results
Food basket value
The study of Food Basket in Baltic countries Cost of estimated food basket in Baltic
shows that the cost of recommended estimated countries (EUR)
food basket for a family in Baltic countries, is
between EUR 280 and 319 per month: the
highest in Latvia, the lowest in Lithuania. The cost
of recommended estimated food basket per
family in Estonia is EUR 304.
The tax environment has little impact on
differences of food baskets’ cost in the three
Baltic countries, since Estonia, Latvia and
Lithuania apply a similar rate of value added tax
(VAT), excluding the reduced rate for certain
foodstuffs. However, the VAT rate in Estonia is
1% less than in Latvia and Lithuania; therefore
Source: Study of Food Basket in Baltic countries
the cost of an estimated food basket for an
performed by Institute for Private Finances,
Estonian family approaches the relevant estimate Swedbank
in Latvia, unless this difference is eliminated.
It should be noted that Latvia applies excess duty
on coffee beans; however, this tax has a minor
The Impact of Average Wage
effect on the final cost of estimated food basket.
Nutrition experts recommend that the monthly The cost of the same food basket is highest in
coffee consumption should be no more than 150 Latvia, both in absolute amount and after the
g, which constitutes less that EUR 2 per month. assessment of average wage after taxes
differences in Baltic countries. Assuming that both
family adults earn an average wage, family in
Latvia spends 32%, Lithuania 29%, Estonia 22%
Household income expenditure and average annual food and non-alcoholic beverages inflation
(%)
Estonia Latvia Lithuania
Food basket cost per person, EUR 85.51 89.49 78.54
Food basket cost per family with children, EUR 304.41 318.60 279.59
Family average wage level after taxes, EUR (2012Q3) 1362 982 976
Percentage of household income spent on estimated food 22% 32% 29%
basket, if family income is two average wages
Average annual food product and non-alcoholic drinks inflation 3.9 2.3 3
(2012)
Source: Calculations of Institute for Private Finances, Swedbank, based on the study of food baskets in Baltic
countries and data of national departments of statistics and the EU Statistical Office Eurostat
Institute for Private Finances, Swedbank 5

6. of total average wages on food.
Cost structure of food basket, broken down
Cost structure of food basket by product group in the Baltic countries (%)
The biggest proportion of expenditures (on
average 37%) takes the protein group, i.e. meat,
fish, dry beans, nuts, etc. The major drivers in this
group of products are pork meat, fresh fish and
chicken. The remaining part of food basket cost is
distributed on a relatively even basis. On
average, cereals and dairy products each
constitute 15%, vegetables and fruits each 10-
13%.
The cost structure of food baskets in Latvia and
Lithuania is more similar than in comparison with
Estonia. The most distinguished product group is
pork meat and fish, the cost of which of the
estimated food basket in Estonia is higher than Source: The study of food basket in Baltic countries
other Baltic countries by 6%. This difference is performed by Institute for Private Finances,
mainly caused by the price of pork in Estonia, Swedbank
which is 29 % higher than in Lithuania and almost average of EUR 110 for proteins, EUR 49 for
10 % higher than in Latvia. However, Estonians bread and cereals, mainly black and white bread,
should then allocate a lower amount of the cost of and EUR 44 for dairy products per month.
estimated food basket for vegetables, dairy Expenditures for vegetables (mainly potatoes,
products, bread and cereals. cabbage and carrots) and fruits (mainly apples
and banana) would amount to EUR 69 per month.
If family consumes the amount of food provided in
estimated food basket, they will spend an
Cost structure of food basket for a family, broken down by product group in Baltic countries
(EUR per month)
Total: Total: Total:
€ 304.41 € 318.60 € 279.59
Source: The study of food basket in Baltic countries performed by Institute for Private Finances, Swedbank
Institute for Private Finances, Swedbank 6

7. Differences in food prices
After comparing food prices between Estonia, Prices of the most popular products in Baltic
Latvia and Lithuania, the largest differences were countries (EUR/kg)
found in dairy products. For example, 300−400 g
pack of sour cream in Estonia costs EUR 1.87, in
Estonia Latvia Lithuania
Lithuania EUR 2.26, and Latvia EUR 2.80;
300−400 g pack of yogurt respectively EUR 2.08, Black bread 1.54 1.62 1.44
1.76 and 2.38. Meanwhile minimum differences White bread 1.33 1.6 1.79
occur in the category of fruits. One kilo of the Milk 0.54 0.68 0.57
cheapest apples in Baltic countries ranges from
Yogurt 2.08 2.38 1.76
EUR 0.53 to 0.68, one kilo of bananas – from
EUR 1.30 to 1.50. Sour cream 1.87 2.8 2.26
Cottage
The highest cost for one kilo of the most popular 3.88 3.37 2.91
cheese
black bread is in Latvia, white bread – in Potatoes 0.24 0.32 0.26
Lithuania, meanwhile, the highest cost for one kilo
of pork meat is in Estonia, lowest – in Lithuania Cabbage 0.27 0.27 0.3
(difference – EUR 1.12 /kg). The cheapest Carrots 0.26 0.38 0.39
potatoes are in Estonia; however one kilo of Apples 0.53 0.68 0.64
cottage cheese is approximately a quarter more Bananas 1.34 1.5 1.3
than expensive than cottage cheese in Lithuania.
Oranges 1.49 1.27 1.28
Differences in prices (even in neighbouring Eggs 1.26 1.52 1.31
countries) result from a group of factors, which Pork 4.93 4.5 3.81
should be analysed separately. For example, the Chicken 2.6 2.58 2.5
part of domestic demand that is met with imported
production (import partners, their prices, tax Butter 6.44 6.67 5.94
system requirements) and domestic production Sugar 1.02 1.17 1.06
(cost of domestic producers). Also important is
the export of manufactured products, since Source: The study of food basket in Baltic countries
successful trading with higher living standard performed by Institute for Private Finances, Swedbank
countries facilitates opportunities for domestic
producers to maintain a higher price level. The
final price of products is influenced by the
economic environment of a country (purchasing
power of its residents, tax system changes).
Institute for Private Finances, Swedbank 7

8. Effect of food promotions
If usual food prices are known, special offers and Thus, if a family buy discounted food, the most
promotions may be a great opportunity to reduce expensive estimated food basket would be in
personal and household expenditures. In Estonia, but not in Latvia. Here it will amount to
accordance with the data of analysis, which was EUR 295, and in Latvia it will cost 7% less, i.e.
commissioned by Institute for Private Finances, almost EUR 275 per month. After considering the
Latvians can save the biggest amount if they effect of food promotions, the cost of the basket is
purchase at discount: families with two children, still the lowest in Lithuania. Here its cost will
who purchase products indicated in the amount to slightly more than EUR 256 per month.
recommended estimated food basket, would save
almost EUR 44 or 14% of all funds intended for
basket purchase. Discounts offered by stores to a
family living in Lithuania would help save EUR 23
per month, i.e. 8% of the funds intended for
basket purchase, in Estonia respectively EUR 10
or 3%.
Family food basket cost difference, assessing the effect of food promotions (EUR per month)
-3% -14%
-8%
Source: The study of food basket in Baltic countries performed by Institute for Private Finances, Swedbank
Institute for Private Finances, Swedbank 8

9. Relevant information
Economic Indicators of Baltic Countries VAT rates for food in each Baltic country
(%)
Although foodstuff and non-alcoholic beverages
in Baltic countries take the biggest proportion of
Estonia Latvia Lithuania
expenditures, a considerable amount of products,
including money, ends up in the garbage. In VAT rate 20 21 21
accordance with the European Commission
study, 27 European Union (EU) members Source: EU Statistical Office Eurostat
annually generate 89 million tons of food waste,
or 179 kg per capita. This is expected
to rise to about 126 million by 2020, unless
additional prevention policy is adopted or
activities are taken. Hence it was announced
that 2014 will be the Year Against Food Waste.
Average monthly wage level before and after Annual average inflation and food inflation in
taxes in each Baltic country in 2012Q3 (EUR) each Baltic country and the EU average in
December, 2012 (%)
Source: National departments of statistics Source: National departments of statistics
Food waste in Baltic countries
EU27 Estonia Latvia Lithuania
Food waste kg per capita 179 260 94 171
Food waste arising by households, % 42% 23% 37% 19%
Food waste arising by households, kg/year 76 60 34 33
Food waste in country, tonnes/year 89 277 472 355 000 216 000 581 000
Source: Data of preparatory study on food waste across EU 27, which was published in 2010
Institute for Private Finances, Swedbank 9

10. Household Budget Structure in Baltic The largest proportion of expenditures (almost
Countries 26%) on food and non-alcoholic beverages is in
Lithuania, and the lowest (almost 21%) in
Based on Eurostat, the EU Statistical Office, data Estonia. Latvia’s expenditures on food and non-
expenditures on food and non-alcoholic alcoholic beverages amount to almost 24% of
beverages form the largest part of household total expenditures. Meanwhile, relevant average
expenditures in all three Baltic countries. expenditures in the EU are below 16%.
Household expenditure distribution, Baltic countries 2012 (%)*
EU27 Estonia Latvia Lithuania
Food and non-alcoholic beverages 15.3 20.9 24 25.9
Alcoholic beverages and tobacco 4.3 8.8 7.0 8.6
Clothing and footwear 6.5 6.4 5.3 5.9
Housing, water, electricity, gas and other fuels 16.1 15.1 15.7 13.2
Furnishings, household equipment and routine
6.4 4.4 4.1 5.6
maintenance of the house
Health 4.2 3.3 5.5 6.1
Transport 15.2 13.8 14.8 13.2
Communications 3.2 4.2 3.9 3.5
Recreation and culture 9.8 8.0 7.0 5.3
Education 1.2 1.6 1.4 1.7
Restaurants and hotels 9.0 8.9 6.4 6.4
Miscellaneous goods and services 8.8 4.6 5.0 4.6
Source: Harmonised consumer price index, Items weights, Eurostat
* Savings and expenditures for financial commitments were excluded
Institute for Private Finances, Swedbank 10

11. Further information
Erika Pahne
Head of Baltic Institutes for Private Finances
Tel.: +46 70 2271656
E-mail: erika.pahne@swedbank.se
Odeta Bložienė
Head of Institute for Private Finances, Swedbank,
in Lithuania
Tel.: +370 687 90767
E-mail: odeta.bloziene@swedbank.lt
Adriāna Kauliņa
Head of Institute for Private Finances, Swedbank,
in Latvia
Tel.: +371 674 44489
E-mail: adriana.kaulina@swedbank.lv
Anne Kalberg-Sägi
Head of Institute for Private Finances, Swedbank,
in Estonia
Tel.: +372 50 52747
E-mail: Anne.Kalberg-Sagi@swedbank.ee
Institute for Private Finances, Swedbank 11