From Iceland — Bónus Will Not Freeze Product Prices

Bónus Will Not Freeze Product Prices

Published August 26, 2022

Photo by
Art Bicnick

Bónus manager Guðmundur Marteinsson believes it is not responsible to freeze the company’s product prices, reports RÚV.

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This comes after Krónan announced Wednesday that it intends to freeze the prices of 240 product types. Guðmundur says Bónus’s market dominant position makes it impossible for the company to do the same.

“A company like Bónus invests very little. It is a very low markup and we are very sensitive to cost price increases. And in fact, we are defined as a market leader and we are not allowed to sell a product below the cost price. In the situation where you are getting a 10% increase, the markup is wiped out and goes below the cost price, which is not allowed in our case ,” Guðmundur says.

Inflation is around 10% and product prices have risen sharply since Russia invaded Ukraine six months ago. Guðmundur believes it is likely that product prices will continue to rise in the near future. “There are difficult times ahead. Now the slaughter of sheep is coming up and it seems to me that prices to farmers are being raised by 20-30%. We have yet to see what effect it has on our purchases,” he says.

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