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COST OF LIVING

Swedish shoppers head to Norway for cheaper groceries

Norwegians have long been crossing the border and filling their shopping baskets in Sweden. However, thanks to soaring food prices, Swedes are now heading to Norway to try and slash their grocery bills.

Groceries meats
The surge in food costs in Sweden is having a beneficial impact on commerce in Norwegian border areas. Photo by Alan Alves on Unsplash

In Norway, the “harryhandel” phenomenon – travelling across the border to shop and take advantage of lower prices in Sweden – has a long tradition.

However, the recent spike in food prices in Sweden is reversing this trend, and Swedes are heading to Norway, according to the finance section of the Swedish newspaper Expressen

In Norway, the annual price increase for food and non-alcoholic beverages fell from 12 to 8.8 percent in February. This is significantly lower than the price increase in neighbouring countries.

In Sweden, the annual price increase for food during the same period ended up at 21.6 percent, which has led to more Swedes going to Norway to buy cheaper food. 

READ MORE: Why are food prices in Sweden going up so much more than elsewhere?

Furthermore, the Norwegian krone has weakened considerably against the Swedish krona. Between now and February last year, the Norwegian krone is down seven percent against Sweden’s krona. 

Bananas, broccoli, red peppers, carrots, oranges, muesli, and diapers, are among the products that are now cheaper in Norway than they are in Sweden, according to Expressen.

A manager of a Rema 1000 supermarket close to the Swedish border told Norwegian public broadcaster NRK that dairy products and Norwegian seafood were popular with Swedish shoppers crossing the border. 

What caused the price difference?

There are several reasons why Swedish food prices have risen more than Norwegian ones.

Norwegian customs duties on agricultural products lead to Norway being more shielded from international price fluctuations on products such as cheese and milk.

Typically, this has meant that Norway has had higher prices for food due to less competition, but now this can help keep prices lower for specific products in Norway.

Furthermore, competition between grocery chains is also a potential contributor to price development.

The second largest grocery chain in Norway, Kiwi, chose not to raise prices in February. This forced both Coop Extra and Rema 1000 to follow suit. Supermarkets in Norway raise prices wholesale twice a year, once in February and once more in July. 

Meanwhile, food prices in Sweden have seen their biggest spike since the 1950s. Prices of eggs, dairy products, and fats have risen more than 30 percent. Sugar has risen by just under 50 percent, and cauliflower is around 80 percent pricier than a year ago.

A lack of competition among Swedish supermarkets and an increase in the cost of importing goods are both considered to be factors behind the price hikes. 

Shopping in Sweden is still cheaper overall

With these recent price developments, some may ask whether shopping trips from Norway to Sweden may be a thing of the past.

Overall, it is probably still cheaper for Swedes and Norwegians close to the border to shop in Sweden. 

However, shoppers need to be more attentive, as not everything is cheaper in Sweden anymore – something which used to be the case just a year ago.

“Food is probably not cheaper in Norway, but the increase in food prices has been significantly lower in Norway than in Sweden over the past year,” Bendik Solum Whist, head of the supermarket and grocery sector at Virke, a trade industry organisation, told NRK. 

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WORKING IN SWEDEN

How some highly-skilled foreigners are missing out on tax cuts in Sweden

Foreign researchers in Sweden can in some cases have up to a quarter of their salary exempted from income tax for seven years under Sweden’s 'expert tax' rule, but many people who don’t realise they qualify miss out due to a tight application deadline.

How some highly-skilled foreigners are missing out on tax cuts in Sweden

Wait, an expert tax? Who qualifies?

In order to qualify for the so-called expert tax, you have to meet five formal conditions.

You cannot be a Swedish citizen and you must not have been listed as a resident in Sweden at any time in the five years prior to your application.

You also can’t have plans to stay in Sweden for more than seven years (although you won’t be penalised later if you do end up changing your mind and staying longer), and you need to work for a Swedish employer, or a foreign employer permanently established in Sweden.

Finally – and this is the crucial requirement for many researchers, who don’t realise they qualify in time – you must submit your application for expert tax relief to the Taxation of Research Workers Board (Forskarskattenämnden) no later than three months after the date you began working in Sweden.

Why don’t they realise they can apply?

Well, the Income Tax Act, which regulates this rule, stipulates that the researcher’s work needs to include “qualified research or development tasks of such nature or at such skill level that there is significant difficulty to recruit comparable personnel within Sweden”. 

This, the Universitetsläraren magazine reports, means that higher education institutions where these foreign researchers work interpreted the rule to mean that only foreign researchers with specialist skills can be granted tax relief.

However, rules on the Taxation of Research Workers Board’s website state that researchers who have worked for one or two years as a postdoctoral fellow can qualify – although PhD students or recent PhD graduates are not eligible.

According to the magazine, HR at major Swedish universities like Lund only recently became aware that such early career researchers could qualify for the grant.

“Knowledge of who can receive expert tax relief varies according to the department, and centrally we are also not always sure which rules apply,” HR specialist at Lund, Julia Edgerton, told Universitetsläraren.

Despite the fact that a large number of foreign researchers who are potentially eligible for the tax break work at Lund, only 23 employees on average per year have been awarded the tax break in the past three years. Edgerton further told the magazine that this number could increase to at least a hundred per year, now that the university is better informed on the rules.

At Karolinska Institutet (KI), this number was even lower – in March 2024 only 16 employees were receiving expert tax relief, KI HR specialist Patrik Rosén told the magazine.

Another source of confusion is the legal requirement that the person applying for the tax break does not intend to stay in Sweden for longer than seven years, which led some universities to believe that employees with permanent positions could not apply.

In practice, however, intention to stay is assessed primarily on what the applicant states in their application, rather than the type of employment they have.

Ultimately, this confusion over who actually qualifies, as well as the short three-month application window from the start of employment, means that people who could have benefited from the tax cut do not find out that they qualify until after the deadline has passed. And with the Taxation of Research Workers Board refusing to accept late applications, these researchers are missing out on seven years of 25 percent tax cuts.

Is anything being done to stop this?

Yes. A government directive in June 2023 launched a review of the expert tax rules in order to see, among other things, if they have had the intended effect and whether any changes are required in order to “increase the rules’ international competitiveness and address any difficulties identified in the application of the law”.

Such changes could include potentially scrapping the rule that applicants must be considered experts in their field, and replacing it with a simple income-based rule, which would allow applicants earning over a certain amount (potentially varying depending on the industry) to automatically qualify. 

There is currently an income-based rule in place, allowing anyone earning over 114,691 kronor a month (2024 figures) to qualify, but as this is more than triple Sweden’s 34,200 kronor median salary, there are few researchers who qualify via this route.

The directive also includes potentially increasing the size of the tax cut, as well as extending the application deadline, removing the requirement that applicants may not be Swedish citizens (thereby opening it up to returning Swedish researchers who have spent a significant amount of time living abroad), and extending the time period in which applicants must not have lived in Sweden before applying, while potentially providing an exception for applicants who completed their doctoral studies in Sweden. 

The proposals from this review will be presented no later than January 15th, 2025.

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