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Just a year after the Norwegian Competition Authority launched an investigation into the competitive situation in the grocery industry, the Authority has released a new survey of purchasing prices in the grocery industry.
The new survey confirms last year’s findings, namely that in part large differences in purchase prices.
A similar survey last year revealed that in some cases there was more than a 15 percent difference in price on products that Norgesgruppen and other chains received from certain suppliers. Then it was the purchase prices for 2017 that were examined, while the figures that have now been presented apply to 2018 and 2019.
Norgesgruppen is the largest grocery producer in the country with chains such as Kiwi, Meny and Spar. The group is controlled by the Johannson family and now has 44 percent of the retail market.
– This was not a surprise. The differences are the same as those revealed last time. The only difference from last year is that one of the richest people in Norway has become four billion crowns richer. There we see where the money goes, says Coop communications director Bjørn Takle-Friis.
It refers to the fact that Johan Johannson has increased his fortune by four billion crowns on Kapital’s list of the 400 richest people in Norway.
– We strive for equally low prices. There are no real price differences in the store between Kiwi and Extra. In the Kiwi owner’s wallet, we see again where the money is going.
Following last year’s survey, the Norwegian Competition Authority took action against the Norgesgruppen facilities and against the suppliers Orkla / Lilleborg and the owner of Freia, Mondelez. The Competition Law prohibits the establishment of different conditions to obtain equal benefits. The outcome of the investigation so far is unclear.
Reject the method
Norgesgruppen believes that the survey does not provide a complete picture of purchasing conditions in the industry.
– The audit has now also looked at only a handful of our 1000+ suppliers and therefore does not provide a complete picture of the differences in purchase prices, says Bård Gultvedt, Director of Trade Policy and Government Contact at Norgesgruppen.
In recent years, there has been a discussion about regulations in the grocery industry. One of the proposals that has been debated is the equality of purchase prices, which in practice would reduce the purchasing power of Norgesgruppen.
– The Norwegian Competition Authority report shows that negotiations are important to keep food prices low. Without real negotiations, food prices will be higher, Gultvedt notes.
Coop recently came out and criticized the suppliers for keeping the big price differences in the negotiations.
– We note that there is a long way to go to reduce prices. If they don’t, someone must intervene. There will be no lower prices for reports, says Takle-Friis.
Rema also brings the findings to the negotiating room in the annual fall search.
– Of course, we take into account the results in negotiations with suppliers. In our opinion, providers are also not in the long-term interest in giving too big an advantage to one player, at the expense of the other two, Rema’s manager Trond Bentestuen notes in an email.
Rema is also now awaiting action from the Norwegian Competition Authority.
– As long as the Norwegian Competition Authority only presents the figures, without acting on them or giving clear statements, whether within the law or outside the law, there is a risk that suppliers will consider it a tacit acceptance. In the worst case, we run the risk that it contributes to strengthening current practice.
– Maybe I should pretend to be shaken, but I’m not, appears in an email from Rema.
Not even a case
In the survey that has now been presented, the same 16 providers have been examined.
– The survey shows that the results that we present then were not an isolated case. Differences in purchase prices are still important for some suppliers. Furthermore, we see that there is a relatively large variation from year to year for the individual provider. For some suppliers, the changes from 2017 to 2019 are big, says Sigurd Birkeland, who is the head of the Food Project at the Norwegian Competition Authority.
The audit follows up with suppliers to learn more about the reasons for the differences.
– The Norwegian Competition Authority will now collect information that can shed light on the reasons for the price differences. The follow-up of all the providers included in the survey, both those with minor differences and those with major differences, will be helpful in our assessment of causes. We plan to continue the mapping in the coming years and it will be interesting to see how it develops further and if any changes to the providers we mapped will give the same result, says Sigurd Birkeland in a press release.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For more terms, see here.
