Iceland Mag

10 Reykjavik

Iceland Mag

Food & Drink

Costco effect: Market share of domestically grown tomatoes dips below 50%, imports grow

By Staff

  • The Icelandic tomato harvest Icelandic farmers have used renewable green energy to grow tomatoes, cucumbers and various other vegetables in geothermally heated greenhouses. Photo/GVA

Imports of vegetables and berries increased significantly in 2017, largely due to the entry of US retailer Costco into the Icelandic market. While consumption grew, Icelandic vegetables and berries lost market share. Domestically grown tomatoes now make up 47% of the domestic market. Domestic production dropped by 10% as imports pushed down prices. The domestic production of cucumbers dropped by 2%. Domestically produced cucumbers till make up 94% of the total market.

Read more: Heating soccer fields and growing cucumbers: 9 ways in which geothermal energy is used in Iceland

Thanks to geothermally heated greenhouses Icelandic vegetable farmers have satisfied most or all of the domestic demand for cucumbers and tomatoes, and a significant share of the demand for bell peppers and berries. The arrival of Costco led to a dramatic increase in the market share of imported berries. According to figures compiled by the local newspaper Morgunblaðið imports of strawberries increased by 94%.

Imports of tomatoes increased by 23%, and imports of cucumbers exploded, increasing by 1,262%. Virtually no cucumbers were imported in 2016. Imported cucumbers now make up 6% of the total consumption.

Red more:  Costco-effect: Locally grown strawberries rot in greenhouses as imports flood market

The chairman of the federation of greenhouse farmers told Morgunblaðið that the Costco-effect was having a serious impact on local vegetable producers who have been forced to throw away large quantities of crops:

"Unrestrained imports have a negative impact on farmers' bottom line. People are selling less and the price of domestic produce drops."

He points out that this development has serious environmental consequences, as the carbon footprint of imported vegetables is significantly larger than that of the domestic production.

"One wonders about the carbon footprint we Icelanders are leaving when we are importing large quantities of foreign produce, but throwing domestic produce in the trash. We would like to reduce the carbon footprint of Iceland, but how are we going to do that when we are facing completely uncontrolled imports?"

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