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July 1st, 2013

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Danish shoppers encounter the steepest prices in the EU when they buy food and beverages, according to a report released by the EU statistics keepers, Eurostat, last week.

Prices in Denmark are 43 percent more expensive than the average prices of the other 27 EU member states. The price difference long outpaces that faced by the Swedes, who have the second most expensive prices at 24 percent above the average, and Austrians, who pay 20 percent more. Only Norway and Switzerland, which are not EU member states, are more expensive.

”The prices are higher in Denmark than most other European countries, even if you subtract taxes and fees and take the high wages into account,” Vagn Jelsøe, the head of consumer association, Forbrugerrådet, told Ritzau news service. “It’s a result of faulty competition."

It is particularly the prices of bread and cereal, meat, fish, oil and fats, and non-alcoholic drinks that have pushed Denmark to the pinnacle of the EU price listing. The Eurostat report was based on a comparison of around 500 products.

The cheapest goods can be purchased in eastern Europe, where prices in Poland, Romania, Bulgaria and Lithuania are among the cheapest in the EU. Danish prices are more than double as expensive as those found in Poland, where prices lay at 61 percent below the EU average.

One reason for the steep prices is that the poor competition in Denmark when it comes to everyday goods. Politiken newspaper’s annual discount-price check found that five discount shops had the same prices on over 38 checked goods, including milk and oats.

Politiken found that there was only a 13 kroner difference between the most expensive and the cheapest shop. When the prices were increased or decreased in one shop, the same thing occurred in the other shops.

“Competition in Denmark is the poorest in Europe and a new international evaluation shows that the competition authorities are not doing a good enough job,” Benny Engelbrecht, a spokesperson for Socialdemokraterne, told Politiken newspaper. “When the prices are the same down to the øre, then it’s obvious that competition is virtually non-existent and we need to get better at fighting that.”

The government has already changed laws in an effort to generate more competition, including stiffer fines and the possibility of prison time for price-fixing culprits, but as a recent report from the Global Competition Review (GCR) found, more needs to be done.

”Precious few cartel cases have been handled by Forbrugerrådet.  A few years ago a leniency system was introduced, but it has proven largely ineffective in helping Forbrugerrådet find cartels. This is often linked to low fines and little deterrent effect in Denmark compared to other jurisdictions,” the GCR competition index on Denmark read.

Forbrugerrådet currently consists of 18 people who meet once a month in order to decide on the cases that the competition and consumer authority presents to them.