Linas Jegelevičius
Unlike many Westerners, and even when stacked up against Latvians and Estonians, the average Lithuanian household spends more on food, Picodi, an international e-commerce platform, established in its recent survey.
Of 105 countries surveyed, Lithuania is on the 48th place – Lithuanians spend 21% on food and non-alcoholic beverages of their total consumption expenditure. A similar result is seen in Saudi Arabia (20.5%), Lebanon (21%) and South Africa (21.3%.)
To believe the analysis, Lithuania’s closest neighbours spend less on food – Poles took 32th place (17.2%), Latvians – the 40th (19.3%), Estonians – the 45th with 20.2%.
That Lithuanians go in swaths for cheaper groceries, medicine and haberdashery items to neighbouring Poland and, until recently, Belarus (two border precincts were closed in August) is well-known, but the platform’s finding that even braliukai – that is how Lithuanians call their northern neighbours, Latvians, with tongue in cheek – spend less on food raised eyebrows.
What do Lithuanians say about that?
Danguolė from Vilnius says, recently, her family and she went to an ice sculpture festival in Jelgava. When at a Maxima grocery store, she was surprised to see that many items were cheaper there.
“What really surprised me that Lithuanian cheeses are cheaper there than here. On the day of our visit, a pack of butter with a discount cost 0.99 euros. At that time in Lithuania, the same butter cost 1.99 euros the same day. Bananas and cauliflowers, as well as many other products were also cheaper in Latvia,” she told BNN.
Danguolė also points out that, in Latvia, discounts are applied to a much larger quantity of goods with the Maxima discount card.
According to Marius Tilmantas, director of the Purchasing Department at Maxima, although Maxima supermarkets belongs to the same business group operating in all Baltic countries, they, however, operate as independent legal entities.
“In other words, in each country, the retail network operates only in its own market, in the conditions of the competitive environment existing in that country. This applies both to the formulation of the pricing strategy and to the planning and implementation of promotions in order for the retail network to best satisfy the needs of its very different customers and to remain a leader in the extremely competitive and dynamic retail sector,” explained the director.
But, well, those living on the Latvian-Lithuanian border take the “cheaper Latvia” story with a grain of salt.
“When living on the Latvian-Lithuanian border, I did not get the impression that the groceries here are much expensive than on the Latvian side. Alcohol, including beer, yes – it is cheaper in Latvia. It has been that way for many years now due to their lesser excise on alcoholic beverages. When it comes to food, the prices depend on each item – some of food is cheaper here and some is cheaper there,” elders of the Pasvalys, Joniškis and Biržai municipalities opined to BNN.
Besides, they note, most Lithuanians’ purchasing power is higher due to the average Lithuanian wage being higher than in Latvia.
“As everywhere, border dwellers cross the border and look for cheaper goods. But as far as our elderate is concerned, it is not a massive phenomenon.
I’d say the prices are pretty similar on both sides,”
Tomas Krikščiūnas, elder of Daujėnai elderate in the Pasvalys municipality told BNN.
His colleague in Saločiai elderate, Sigitas Savickas, also tends to believe that the price differences are insignificant.
“With the exception of alcohol, which is cheaper in Latvia by a couple of euros. It does make a difference for many,” he told BNN, adding: “However, I know people in other elderates who go to Latvia for grocery shopping regularly. They say that the dairy prices there are better. Besides, some think that the Latvian products are of better quality.”
Savickas, a habitant of Pasvalys, a town near the Lithuanian-Latvian border, said
he sees Latvians in the local pool mostly.
“They say, in general, leisure service prices in Pasvalys are lower than in Latvia. Of course, many of them shop in the local stores, buy groceries, which suggests that the Latvians find the prices here on a lower end,” he added.
Saulius Kužmarskis, elder of Žagarė elderate in the Joniškis district, told BNN that the 1200-people Žagarė town sees a lot of Latvian visitors.
“I’d say, in general, food prices are cheaper in Lithuania, but it depends on the region you are in. But when it comes to booze prices, Latvia has them much better,” S. Kužmarskis said.
Meanwhile, gas prices are lower in Lithuania, he concluded.
Some border residents believe that entertainment and shopping are cheaper in Latvia. Even if supermarkets of retail groceries operating in both countries.
Interestingly, the afore-mentioned survey showed that, in some countries, spending on food and non-alcoholic beverages accounts for less than a tenth of the total expenditure of the average person – in the United States – 6.7%, Singapore – 8.4%, the United Kingdom – 8.7%, Ireland – 9.2%, in Switzerland – 9.9%.
Nigeria (59%), Myanmar (56.6%) and Kenya (56.1%) rank among the countries whose population spends the most money on food.
Why do Lithuanians spend more on food than Poles and Latvians?
Petras Čepkauskas, head of the food section of the Pricer.lt portal, says that, in comparison with developed European countries, Lithuanian food expenses are very high.
“With 218 euros per month per person spent on food, we are among the 12 countries that spend the most on it – practically, we are on the same line as Germany and the Netherlands. The reasons behind that are Lithuania’s 21% VAT on food, also a less competitive market here. It is not surprising that we go to Poland for groceries,” he told delfi.lt
INVL Asset Management’s Chief Economist Indrė Genytė-Pikčienė says that Lithuania “stands out” in the European Union and among neighbouring countries in terms of spending on food, and there are many statistics showing this.
The economist explains that “extremely significant relative costs” for food mean that the country is developing and has serious social problems. However, in the case of Lithuania, there are other factors, she says.
“Our traditions and cultural differences should be considered.
Lithuanians are more accustomed to celebrating holidays at home than residents of Southern or Western European countries, correspondingly, spending on food is much higher, and expenses for the restaurant category are much lower,” she said.
The economist notes that the prices of food and non-alcoholic beverages in Lithuania have already reached (99%) the EU average, and when evaluating individual categories, in some cases even exceeded it. However, the income of Lithuanian residents has not yet reached the EU average.