Estonian supermarkets unite to slash food VAT and ease grocery costs

Estonian supermarkets and the Estonian Retailers Association have joined forces to push for lower taxes on essential groceries. The campaign highlights how high food prices and tax policies are squeezing household budgets. Major chains like Prisma, Rimi, Selver, and Coop are backing the call for change. The group argues that Estonia's value-added tax (VAT) on food remains too high compared to most EU countries. While nations like Germany and Denmark apply a 7% rate, and Sweden recently halved its 12% rate, Estonia has kept its food VAT above the European average. Only Denmark and Lithuania share a similar approach.

Food prices in stores have surged by 40% over the past three to four years, according to Rainer Rohtla, chairman of Coop Eesti Keskuhistu. Nele Peil, CEO of the Estonian Retailers Association, pointed out that food sales volumes have dropped for four straight years as shoppers struggle with affordability. The campaign aims to spark a debate on how tax cuts could ease the burden on everyday essentials.

The association claims that lowering VAT on basic food items would directly reduce shelf prices, either fully or nearly so. They describe the move as a 'win-win' with minimal administrative hassle for the state. Finance Minister Jürgen Ligi, however, dismissed the proposal as a 'brazen and low tactic' to drain public funds.

Local producers would also benefit, as essential food categories already contain the highest share of Estonian-made products. The push for reform comes as households face rising costs and declining purchasing power. The retailers' campaign puts pressure on policymakers to reconsider food VAT rates. If successful, the change could lower prices for staples and support domestic producers. The government has yet to signal whether it will engage with the proposal.