SLI-Paper 2004:2

Price formation and markets for organic products in five EU countries

Authors: Sara Furemar 

In this study we compare the price formation of organic products in Sweden, Denmark, France, Germany and Great Britain. The results are based on an unpublished report commissioned by the EU Commission, with the objective of shedding light on the market for organic produce in the EU. The markets for organic carrots, beef, apples, eggs and wheat flour are studied in detail and compared to the markets for corresponding conventional products. Prices and cost accounts have been collected in production and distribution to provide an understanding of margins and costs in organic production.

The analysis indicates that organic products are more expensive than conventional food. However, there is a large variation, not only between products but also between countries. For example, the price premium, expressed as a percentage, is higher for organic products in low value added product categories such as carrots. Also, price premiums on organic products tend to be lower in Sweden and Denmark than the other countries analysed. One reason might be that the market shares for organic products are relatively large in Sweden and Denmark. The lower price premium in these countries may also be explained by the fact that organic products are primarily sold in regular supermarkets.


Sara Furemar

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