Prisma has been lowering prices since April to mitigate the impact of the VAT increase.

On July 1, the VAT rate will increase to 24%, affecting most those who are already in a difficult economic situation. “VAT is a regressive tax, meaning it disproportionately impacts people with lower incomes, as it takes up a larger share of their monthly earnings. That’s why we have made it a priority to implement the VAT increase in the most customer-friendly and transparent way possible,” says Teemu Kilpiä, Country Manager of Prisma Estonia.

Just like during the previous VAT increase that took effect on January 1, 2024, Prisma is not raising prices prematurely or excessively. “Customer trust is extremely important to us, and during the last VAT increase, we proved our reliability by being one of the only retailers in Estonia that did not treat the tax change as a profit opportunity. This time as well, we promise that all price adjustments will take place exactly on July 1 and that no product’s price will increase by more than the VAT adjustment requires – specifically, no more than 1.64%,” Kilpiä emphasizes.

To fulfill our promise of offering the most affordable shopping basket and to prepare for the VAT increase, Prisma began lowering prices already in April to bring them in line with the best levels on the market. Since then, we have reduced prices on more than a thousand products, focusing on major product categories.

“Our work to bring prices to the best level on the market continues category by category. So far, we have lowered prices on baby products, soft drinks, ice cream, pet products, and grilling meats. Next, we will review prices in categories such as chocolate and confectionery,” says Teemu Kilpiä. “Since the VAT increase also affects producers, in addition to customers and stores, we continue to value Estonian-made products in our selection. Supporting local producers and offering customers a wide range of options is important to us.”

Changing price tags is a major task

As new prices take effect in Prisma stores on July 1, an intensive effort was underway last night and early this morning to replace old food price tags with new ones as quickly as possible. “Our food assortment includes nearly 20,000 different products, which means we need to replace price tags for all of them across our 13 stores,” says the Country Director of Prisma Estonia. “We are doing everything we can to ensure the entire VAT adjustment process is not only transparent but also as customer-friendly as possible.”