Unions ask companies to curb prices as wage deals strain

Trade unions have asked major companies what they will do to help keep collective wage agreements in force, mbl.is reported on Monday. The request was highlighted in a full-page advertisement published in Morgunblaðið.

The Reykjavík Merchants’ Association, the National Federation of Icelandic Commercial Workers and professional associations sent letters to companies that influence prices, asking them to outline their contribution.

The conditions underpinning the collective agreements have collapsed, and the agreements could be terminated on October 8 if the parties decide to activate their termination clauses. Inflation reached 5.6% last month, making clear that the conditions had failed.

The unions said workers had taken a significant risk by accepting low wage increases during a period of inflation. In return, companies were expected to hold back price increases to bring down inflation and interest rates. Instead, prices have continued to rise and interest rates remain very high, they said.

Sláturfélag Suðurlands, an Icelandic meat company, has responded by postponing until January a planned 3% price increase on all its retail products sold under the SS, 1944 and Búrfell brands. Some retail products that were due to rise by 5% will instead increase by 3%.

“With this contribution, the company wants to support stability and hopes that the collective agreements will remain in force,” Sláturfélag Suðurlands said.

The company estimates that postponing or changing the planned price adjustments will cost it between 90 million and 110 million Icelandic krónur.

The companies contacted by the unions are Arion bank, Bera, Drangar, Eimskip, Festi, Garri, Hagar, HS Orka, Innnes, Íslandsbanki, ÍSAM and Ó. Johnson & Kaaber, Kaupfélag Skagfirðinga, Kvika bank, Landsbankinn, Landsvirkjun, Natan, Orkuveitan, RARIK, Samskip, Sláturfélag Suðurlands and Veitur.