IELKA: How much does the supermarket basket cost in Greece compared to 7 European countries - The differences in VAT

Thursday, September 26, 2024

---

The recurring report by the Institute of Consumer Goods Retail Research (IELKA) presents the results of an organised price comparison survey (based on data from price comparison platforms in each country, and price surveys from supermarket chains) on a typical household basket of products in organised food retailing (supermarkets) in Greece in July-August 2024 and in France, the United Kingdom, Spain, Italy, Portugal, Germany and Romania respectively.

What the comparison without VAT shows

The price comparison is made with and without the value of VAT, which varies in each country.

For this analysis, prices in a total of 42 product categories were compared. These product sub-categories are examined from a significant sample of over 6,000 product prices and 44 different supermarket chains in the eight countries in total to calculate average prices, with samples taken from authoritative price comparison sites in Greece and abroad, as well as from supermarket chains.

The data include final prices of both branded and private label products in each country. It should be clarified that prices refer only to supermarket chains and not to other outlets.

The comparison of average basket prices (Table 1) shows that all four countries have significantly more expensive average baskets than Greece, 33% more expensive in Germany, 25% in France, 19% in the UK, 14% in Italy, 3% more expensive in Portugal, 5% in Spain and Romania is about the same level as Greece.

The picture of the results changes significantly when we subtract the VAT attributable by country to get an idea of the actual prices of supermarket products. The comparison of baskets in this case (Figure 1 and Table 1) shows that all seven countries have a more expensive average basket than Greece, Germany by 40%, France by 33%, the UK by 27%, Italy by 21%, Spain by 12%, Portugal by 5% and Romania by 5%.

This is a result of the difference in the low VAT by country (this is VAT on food and drink). In Greece this VAT is 13%. The VAT is significantly higher than in the UK (0% or 5%) and France (10% and 5.5%), Spain (10% and 4%), Portugal (13% and 6%), Italy (5% and 4%), Germany (7%) and Romania (9%), but also in most EU countries.

VAT differences by country

The main difference is that foodstuffs that in Greece are subject to the high VAT rate of 24% in other countries are subject to the low VAT rate, which is lower than the Greek rate of 6%, 5.5%, 4% or even 0%. Very few products are subject to low VAT in Greece and high VAT in other countries (e.g. baby wipes).

It should be noted that the effect of excise taxes (e.g. coffee) cannot be included in the above figures.The general conclusion from the above analysis is that the organised Greek food retailing (supermarkets) provides Greek consumers with access to products for their typical basket, on average, at a lower price which is the result of the organised effort of suppliers and retailers to contain prices in recent years.

This trend, with slight fluctuations, has been consistent over the last 12 years that this survey has been carried out by IELKA. The longitudinal comparison of prices with abroad shows that in recent years Greece has consistently been cheaper than the typical basket of the countries compared, with some fluctuations which do not change the general conclusion of the analysis.

Source: Capital.gr, 16th of September 2024.