EU refrigerant rules threaten dozens of small grocery stores

Several small grocery stores in Finland could close in the coming years because of an EU regulation, Yle reports. The regulation bans the use of fluorinated greenhouse gases, which are widely used in shops’ refrigeration equipment.

The gases have a strong climate-warming effect and must be replaced with more environmentally friendly alternatives by the end of 2029. Because the new refrigerants cannot be used in older equipment, the refrigeration systems must be replaced.

Ilkka Nieminen, director of the Finnish Grocery Trade Association, said rural shops are particularly at risk. A survey conducted by the association in summer 2023 found that replacing refrigeration technology costs an average of about 190,000 euros per store. The average annual profit of village shops is less than 10,000 euros, according to the association.

“For many rural shops, replacing the refrigeration equipment is financially impossible,” Nieminen said. He warned that residents of small municipalities could face longer journeys to the nearest grocery store.

Nuutti Rantatupa, Kesko’s director responsible for stores and retailer operations, said dozens of Kesko stores were at risk of closure. Replacing the refrigeration equipment at a small K-Market store, for example, costs at least 200,000 euros, he said.

The properties housing the stores must also be in good condition before the equipment can be replaced. Structural problems would add to the costs, Rantatupa said. After the upgrade, a store would need to operate for at least 10 years for the investment to pay for itself. The smallest municipalities, where purchasing power is declining, are at greatest risk.

In 2023, 142,000 people, or 2.6 percent of Finland’s population, lived in the service areas of village shops, according to a study commissioned by the Ministry of Agriculture and Forestry. The figure includes village shops receiving support from the Finnish Food Authority.

Nieminen said the existing village-shop subsidy of 11,400 euros was insufficient and called for financial support to help rural stores replace their refrigeration equipment. Without grocery services, the appeal of these residential areas would decline, he said.

Rantatupa called for a longer transition period to comply with the regulation, allowing stores at risk of closure to use their existing equipment until the end of its working life.