Policy Overview
The Swedish government announced on September 4 a food price support package centered on temporarily reducing the value-added tax (VAT) on food products to support households facing rising food prices under high inflation, as part of its 2026 budget proposal.
Specific Support Measures
Food VAT Reduction: Temporarily reduce VAT on food from 12% to 6%. This is expected to save approximately 6,500 Swedish kronor (about 104,000 yen, 1 SEK = about 16 yen) annually on food expenses for households with two children. The measure will be effective from April 1, 2026, to December 31, 2027.
Price Monitoring System: Establish a Food Price Committee within the Consumer Agency to monitor price trends and ensure that VAT reductions are appropriately reflected in retail prices.
Deregulation Measures: Instruct the Swedish Agency for Economic and Regional Growth to deregulate the food retail industry, strengthen the competitive environment for grocery stores, and promote long-term price reductions. Also encourage local governments to increase the number of grocery stores.
Policy Background and Challenges
Prime Minister Ulf Kristersson explained that the core of this budget proposal is support for families with children, and that the food VAT reduction will lead to lower food prices. However, local media has reported expert opinions suggesting that increasing subsidies such as child allowances and housing allowances would be more appropriate for supporting low-income groups than VAT reductions that require substantial government budget (Aftonbladet, September 4, 2025).