In recent years, Estonian households have been hit with a tough reality – food prices are rising faster than wages and people’s ability to afford them. According to Statistics Estonia, food prices increased by 7.1% in May 2025, much higher than the overall inflation rate.

Although falling fuel prices offered some relief, food prices have continued to climb. A grocery basket that cost 80 € for a family of four in 2021 now costs123 € – almost 40% more.

Shopping habits are changing – price comes first

With such price hikes, many Estonians are now prioritizing price over quality, healthiness, or country of origin. Only 56% of consumers now say they care about health, 45% avoid additives, and just 59% prefer local products – down from 74% previously.

Rising costs are making everyday choices harder, and many families feel it’s becoming increasingly difficult to afford quality and varied meals.

Retail sales falling, local producers struggling
Since 2022, food retail sales in Estonia have been declining. At the same time, imported food is becoming more common – due to both lower prices and supermarket policies. Local producers are often pushed off the shelves as big chains choose cheaper foreign alternatives.

The Estonian Institute of Economic Research warns that this trend could leave 25% of Estonian families struggling to meet daily expenses.

Why are prices rising?

The main reasons for rising food prices include:

High import costs and dependence on foreign suppliers

Large supermarket markups (up to 70%)

VAT increase (from July 2025 – now 24%)

Excise and other tax hikes

Lack of pricing transparency

Producers say they often have no choice but to accept unfair conditions or leave the market altogether.

What are other countries doing differently?

Estonia is one of the few countries in Europe – along with Denmark, Bulgaria, and Lithuania – that doesn’t offer reduced VAT on food. For example, Latvia applies a 5% VAT rate on locally grown fruits and vegetables to support domestic production.

Many countries use lower VAT rates or exemptions on essential goods to ease pressure on consumers and help local producers.

How can consumers cope?

With food prices up nearly 50% from previous years, families are finding it harder to stretch their budgets. Often, compromises must be made on food quality, quantity, or variety.

When your budget is tight, a personal loan may help
If price hikes catch you off guard and your family budget falls short, a Laen.ee consumer loan could provide short-term relief. For new customers, the first loan of up to 10,000 €  is available with 0% interest for 6 months – completely free.

A customer loan can help cover:

• Grocery bills or bulk food purchases
• Back-to-school shopping
• Budget gaps during tax increases