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Food prices in Albania are "going crazy", rising 5 times faster than in the EU

2026-09-13 09:34:08Aktualitet SHKRUAR NGA REDAKSIA VOX

Food prices in Albania are "going crazy", rising 5 times faster than

The government is seeking to curb food price hikes through "PriceWatch", a platform that will enable consumers to compare prices across supermarket chains.

The initiative can increase transparency, help families choose the cheapest alternative, and exert competitive pressure on traders, but it does not directly affect the costs that shape the price.

Behind the price of a food product in our country lies a long chain of factors, from insufficient domestic production, dependence on imports, 20% VAT, high fuel prices, transportation, losses during distribution. During the tourist season, this chain is compounded by traffic, delays in supply, and a demand that domestic agriculture is unable to keep up with.

The data shows that the problem cannot be explained solely by the rise in prices of goods abroad. In July 2026, according to Eurostat, prices of food and non-alcoholic beverages in Albania increased by 3.2% compared to a year earlier, while the average increase in the European Union was only 0.6%.

Food prices rose in Albania five times faster than the European average. Albania had the highest growth in the Western Balkans, ahead of Kosovo, where food prices rose by 2.7% in July, and Montenegro, with 2.3%.

In Serbia, food prices were 5.6% lower than a year earlier, while in North Macedonia they fell by 0.3%.

This occurred at a time when two external factors were supposed to help reduce the pressure, the strengthening of the lek against the euro and the decline in the average price of imported foods.

Calculations based on INSTAT foreign trade data show that, in the first seven months of 2026, the average price per kilogram of imports of the "Food, beverages and tobacco" group fell by 6.5% compared to the same period in 2025. However, the prices paid by the consumer continued to increase.

This discrepancy shows that the pressure no longer comes only from international markets. It is increasingly being created domestically.

Eleni Babameto, who owns one of the largest food import and distribution companies, "Teuta", says that high prices in Albania are a result of the lack of local production, the fiscal burden, and transportation costs.

"We do not have sufficient domestic production nor a developed food industry, while we have one of the highest VAT rates for food in Europe," she says.

According to Ms. Babameto, on the other hand, the high price of fuel affects every link, from the farmer who works the land to the processor, importer and distributor who supplies the points of sale.

In this situation, monitoring can help to identify unjustified differences, but cannot replace a food policy.

The solution requires a coherent package of measures. Alban Zusi, an agricultural expert who operates in the field of agro-industry, says that an analysis is needed to identify opportunities to produce domestically the foods we import.

According to him, this is achieved by supporting the entire chain, from production to processing, as countries in the region have done.

The region, from low VAT to extra measures in the market

One of the reasons why food prices in our country are so high is VAT. Albania taxes grocery products at 20%, as do all luxury goods or other non-essential goods.

Comparing with the Western Balkans puts Albania at a disadvantage. Serbia has the same standard rate, 20%, but taxes basic foods at 10%, according to local tax legislation.

In Kosovo, the standard rate is 18%, while cereals, flour, bread, pasta, cooking oil, milk, dairy products, eggs, and salt are taxed at 8%.

Montenegro has a standard rate of 21%, but for bread, flour, milk and dairy products it uses a reduced rate of 7%.

In North Macedonia, the standard rate is 18%. Basic foodstuffs are taxed at 5%, while some other food categories are taxed at 10%. The 5% rate is also used for animal feed and some agricultural materials and equipment.

Bosnia and Herzegovina does not have a reduced rate, but the single rate of 17% is three percentage points lower than what Albania applies to food.

But, in addition to lower VAT, countries in the region have taken extra measures to curb price increases after the pandemic.

Following the wave of inflation that began in 2021 and accelerated in 2022, with rising energy and food prices, Western Balkan countries intervened with extraordinary measures to curb the cost of living. Later, especially after 2024, some governments moved towards limiting profit margins, aiming to reduce prices without creating shortages in the market.

North Macedonia was among the countries that intervened most forcefully. During the height of the crisis, in 2022-2023, the government froze the prices of several basic products, such as bread, milk, pasta, and eggs.

In February 2025, the measure was changed towards a more flexible model, with a profit margin limit of up to 10% in wholesale and retail trade for 73 food product groups.

Kosovo followed a similar approach with price ceilings for basic basket products. After sharp price increases, the government approved in principle a law to cap prices for products such as cereals, flour, cooking oil, eggs, and hygiene products.

In parallel, the Market Inspectorate's controls on the margins of large importers and agreements that could lead to abuses were strengthened.

Montenegro shifted its focus mainly to margin restrictions. After several interventions during the period 2024-2025, the government expanded the list of products with limited prices to over 70 categories, including meat, dairy, oil, flour, vegetables and baby food. The profit margin was capped at 5% for wholesalers and 7% for retailers, while the measures were extended until the end of March 2026.

Serbia initially used a combination of state reserves and agreements with supermarkets. In the years following the crisis, the government intervened with reserves for products such as flour and oil, and then promoted campaigns such as “Best Price”, in cooperation with trade networks, to reduce the prices of everyday products.

This approach led to a decline in food prices in mid-2026, according to data cited for the region.

In Bosnia and Herzegovina, the measures were implemented in a fragmented manner, due to the country's administrative division. Both entities imposed margin limits on basic basket products. In Republika Srpska, the measures were extended until the end of 2025, with the aim of keeping prices of the most essential products under control.

Albania intervened mainly in 2022, through transparency boards for basic foods and fuels, as well as social packages for the groups most affected by price increases.

But, unlike some countries in the region, there is currently no broad active mechanism for limiting profit margins on food products.


Lack of domestic production, cause of high prices

Consumption and the expansion of tourism have created a larger food market. But agriculture and the processing industry are not able to supply the consistent quantities, to the same standard and at the time required by supermarkets, hotels and restaurants. The gap is being filled by imports.

INSTAT's foreign trade data show that, during the period January-July 2026, Albania imported about 239.3 thousand tons of cereals, 23.1% or 44.9 thousand tons more than in the same period a year earlier. Cereals alone accounted for about 39.5% of the total amount of imported food.

Imports of vegetables and greens increased by 11.1%. For dairy products, eggs and honey, imported quantities increased by 6.8%, to 21.6 thousand tons. Imports of fruits and nuts increased by 5.1%. The map of suppliers has also changed. Imports from Serbia fell by 15%, while supplies from Croatia and Moldova increased, mainly for cereals.

Imports from Ukraine, North Macedonia and Greece also increased. For meat and exotic fruits, the market shifted more towards Brazil, Argentina and Ecuador. The more food comes from abroad, the more exposed the market becomes to transportation, exchange rates, international fluctuations and supply disruptions.

Albania cannot replace all food imports. But it can reduce dependence in categories where it has an advantage, Alban Zusi said.

The greatest potential lies in vegetables, greens and some types of fruits. Vegetable production reached more than 1.44 million tons in 2025, but their imports increased again by 11.1% in the first seven months of 2026.

Hotels, restaurants and supermarkets require continuous supply, consistent caliber, packaging, certification and billing.

Also, in dairy and meat, the potential for increased production is present if subsidies are provided. Reviving livestock requires payments per head, financing for increasing herds, animal feed production, stables, veterinary care, processing, and purchasing contracts.

In cereals, the possibility of import substitution is smaller. Albania does not easily compete with the large areas and mechanized production of Serbia, Ukraine or Croatia. Policy should focus on security of supply, reserves and diversification of partners, not on an unrealistic goal of self-sufficiency.

By 2020, imported food prices increased by 40%

The average price per kilogram of imports of the “Food, beverages and tobacco” group was relatively stable during 2015–2020.

"Monitor" calculations, performed as a ratio of the imported value to the net weight reported by INSTAT, show that the average price was 99.63 lek per kilogram in 2015.

Within six years, the price had moved in a narrow range of around 97–101 lek. The hard hit began in 2021. The average price increased by 16.3%, to 117.96 lek per kilogram. Another increase followed in 2022, this time by 23.9%, bringing the average to 146.12 lek, the highest level of the period.

Compared to 2020, the average cost of one kilogram of imported food, beverages and tobacco had increased by about 44%.

After the peak of 2022, the pressure began to subside. In 2023, the average price fell by 11.2%, to 129.77 lek per kilogram. In 2024, it fell by 6.9%, to 120.85 lek, while in 2025 a slight decrease of 0.4% was recorded, to 120.37 lek.

In the first seven months of 2026, the average price was 115.57 lek per kilogram, about 6.5% lower than in the same period in 2025.

But the blow has not been undone. Even after the decline, the average import price remains about 14% above the 2020 level and roughly 16% higher than in 2015.

Part of the delay in reducing consumer prices may be related to long-term contracts, stocks purchased earlier, and the time it takes to transmit them along the chain. But the fact that the average import price is falling, while food on the domestic market is becoming more expensive, indicates that costs generated within Albania have taken on a greater role.

Expensive fuels and logistics

The price of fuel affects every link in the food chain. The farmer uses diesel for agricultural machinery, the processor pays for the transportation of raw materials; the importer covers the movement from the port or border crossing, the distributor supplies warehouses and points of sale.

Currently, a liter of diesel is being sold at 219 lek per liter, the highest level in the region and Europe.

Even when the product is purchased cheaper abroad, transportation from the border to the warehouse and then to the sales networks can dilute the profit.

According to Ms. Babameto, logistics deficiencies become particularly apparent during the tourist season. Trucks supplying coastal areas can be stuck in traffic for hours. Delays increase fuel consumption, working hours and the risk of losses for fresh produce.

Companies will also face other costs from the European integration process. Standards for food safety, traceability, storage and transportation require investments in facilities, equipment and technology.

These investments are necessary for quality, consumer protection, and exports. But if businesses are not supported with adequate financing, part of the cost may be passed on to final prices.

High VAT, EU treats food as a basic need

Food distributors said that high VAT is the main cause of high food prices. Babameto said that Albania should lower the threshold for basket foods, as the market is now fiscalized and the process is more monitorable.

Albania is not obliged to keep the VAT on food at 20% to align with the European Union. On the contrary, the European framework creates room for lower rates.

According to the European Commission and the VAT Directive, member states can use up to two reduced rates, no lower than 5%, for specified categories. The directive also allows a rate below 5% and a zero rate for a limited number of categories that meet basic needs, including food.

In practice, most EU countries use reduced rates. Germany applies 7%, France 5.5% for most foods, the Netherlands 9% and Greece 13%. Italy uses differentiated rates of 4%, 5% and 10%, Croatia 5% and 13%, while Poland 5% and 8%, depending on the product.

Luxembourg reduces it to 3% for certain categories. Denmark is among the few exceptions. It does not use a reduced rate and taxes food at the standard rate of 25%.

The most recent example of using VAT as an instrument against the cost of living comes from Sweden. From April 2026, the Swedish government temporarily lowered the rate on food from 12% to 6%, with the measure set to remain in force until the end of 2027.

In September, Reuters reported that, according to an assessment by the Swedish Consumer Agency and the National Institute of Economic Research, the reduction had been passed on to retail prices. The Swedish experience shows two things. First, VAT can be used to ease the burden on households. Second, the reduction must be accompanied by monitoring, so that the benefit is passed on to the consumer and not retained in the trade margins.

Ms. Babameto said that, for Albania, a general reduction for all foods would favor in absolute terms even families with high consumption. The most reasonable alternative would be a limited basket of bread, flour, rice, milk, eggs, oil and other basic products, accompanied by reporting of prices before and after the change.

This is where "PriceWatch" can take on a real function, not simply comparing supermarkets, but checking whether fiscal relief is passed on to the citizen.

European prices, much lower incomes

The Albanian paradox starts from the relationship between prices and income. According to Eurostat data on comparative price levels, in 2025, the food and non-alcoholic beverage price index in Albania reached 103.8, with the European Union average equal to 100.

This means that a food basket that costs an average of 100 euros in the EU costs about 104 euros in Albania. A year ago, the Albanian level was 99.6% of the European average.

On the other hand, per capita income in Albania remains around 43% of the EU average, while current individual consumption, an indicator that better reflects the material well-being of families, reaches approximately 48% of the EU average.

The weight that food has in the budget makes any increase more significant. According to the weights published by INSTAT, food and non-alcoholic beverages constitute 34.6% of the Consumer Price Index basket.

In July 2026, overall inflation as measured by the Consumer Price Index reached 3.4%, up from 2.5% a year earlier. Food contributed 1.09 percentage points, or approximately one-third of the overall price increase.

The price hike is not distributed evenly. A low-income family that spends half of its budget on bread, milk, meat, oil, vegetables, and fruit is hit much harder than a family where food accounts for only a fifth of its expenses.

The gap is particularly noticeable among emigrants returning to Albania and having the opportunity to directly compare markets.

Ferdinant Xhindoli, from Durrës, returned with his wife after 33 years of emigration to Italy. He says that over the last year he has noticed a continuous increase in prices.

"I spent about 80 euros on a purchase at a supermarket in Italy. The same products in Albania would have cost me about 120 euros," he says.

According to Mr. Xhindoli, the cost of living could also become an obstacle to the return of emigrants.

"They say that immigrants should return, but if measures and decisions are not taken as soon as possible, I don't believe that many of them can afford to return at these prices," he says./monitor.al


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