Grocery prices in Riga are the highest on average of the three Baltic capitals.

TALLINN — Research results show that the food prices in Riga are the most expensive in the of the three Baltic capitals.

The study shows that while in Tallinn the prices of many food items reach the level Western European cities where people have on average a one-third larger income, they are less than grocery products in Riga.

Estonia’s Institute of Economic Research, a government agency, studied the prices of different food items in European capitals such as Tallinn, Riga, Vilnius, Warsaw, Prague, Bratislava, Budapest, Helsinki, Stockholm and Berlin from Nov. 30. until Dec. 2. 2009.

In Tallinn the price of 3.5 percent milk is more expensive than in any listed cities except Helsinki. Also butter, spaghetti, packed potatoes, light beer, milk chocolate, and white cheese is more expensive than in Riga and Vilnius.

Vilnius’ prices are comparable to Tallinn. However, Riga’s are remarkably higher than the other Baltic capitals, and wheat flower, cucumber, tomatoes, packed potatoes, rapeseed oil cost more than in other capitals included in the study.

According to market researchers at Estonia’s Ministry of Economy, the difference in the prices among European capitals is mainly two reasons such as the scale effect, which allows the keeping extra charges and net cost lower in a larger market area, and different amounts of competing chains.

“Although the competition has improved in recent years, the situation in that area is still stronger elsewhere,” Rasmus Ruuda, a spokesman of the Ministry of Economy told Baltic Reports.

Of course, the living standards and purchase power of Baltic state residents also influence prices, and depending on the individual item, factors such as the tax system, transportation costs, energy prices, the country’s support systems to rural areas, and others affect prices.

“The price politics of the retail companies in case of import products also may vary in different countries,” told Ruuda. “The way how prices are being built up is very individual and it is not possible to mark a similar trend.”

Locally-grown is most cost-effective

Grocers point out that locally-produced food items are significantly less expensive than in Western Europe and usually only imported items cost the same or more.

Kadri Lainas, press spokeswoman of Prisma Family Market points out that there are also many products that are cheaper in Tallin than in any other capital, such as cheese, wieners, toast and vegetables.

“The price level in Estonia is determined by the price offered by wholesalers and middlemen,” Lainas told Baltic Reports. “The main part in the price on the supermarket shelf is formed by raw material and logistics.”

Lainas said that since Estonia is small and far from the main logistic routes, imported goods are pricier than in larger markets.