Price decrease in kiosks and petrol stations

This analysis was carried out by Statistics Norway on a mission from the Ministry of Agriculture. The purpose was to see how kiosks and petrol stations adjusted to the reduction in the value added tax on food implemented 1st of July 2001. The value added tax on food was reduced from 24 to 12 per cent to contribute to lower prices. The reduction in the value added tax equals a price decrease of 9.7 per cent assuming no other price development at the time.

Largest reduction on dairy products, least on non-alcoholic beverages

The analysis shows that the prices of dairy products and other food products decreased the most from June to July 2001, with declines of 10.2 and 9.5 per cent respectively. The prices of bread and cereals went down by 8.1 per cent, while the prices of chocolate and other products of sugar and non-alcoholic beverages decreased the least, by 6.6 and 6.3 per cent respectively. Compared with grocery shops, the prices of dairy products and other food products in kiosks and petrol stations decreased approximately equally. However, the prices of bread and cereals, chocolate and other products of sugar and non-alcoholic beverages were to a larger extent reduced in grocery shops than in kiosks and petrol stations.

Further, the analysis shows that the prices of dairy products and bread and cereals increased more in kiosks and petrol stations than in grocery shops during the year prior to the reduction in the value added tax on food. The prices of chocolate and other products of sugar on the other hand, went up the most in grocery shops in this period of time.

During the year after the reduction in the value added tax on food, the prices of non-alcoholic beverages, bread and cereals and other food products experienced a larger increase in grocery shops than in kiosks and petrol stations.