– Very bad idea – E24

On Thursday, Norgesgruppen announced that they agreed to a “change of cooperation” with Bama.

The change means that Asko will take over Bama Dagligvare’s products earlier in the value chain than today.

Asko is the largest wholesale company in the country. It is wholly owned by Norgesgruppen, which is controlled by billionaire Johan Johansson.

Asko truckers bring carrots, apples, and other fruits and vegetables to Meny, Kiwi, Joker and the rest of the Norgesgruppen stores.

Additionally, Asko moves food and other groceries from factories to dining rooms, hotels and restaurants across the country.

You can get more control

In practice, the change means that Norgesgruppen will have greater control over Bama’s fruit and vegetable distribution.

This is done by shifting responsibility for warehousing and logistics from Bama to Asko.

At the same time, 500 Bama employees will have Asko as their new employer, says Norgesgruppen.

Bama is by far the largest fruit and vegetable player in the country. In 2017, Norgesgruppen owned around 45 percent of Bama.

Bama delivers to the large Norgesgruppen chains in addition to Rema stores. Of the large Norwegian retail chains, only Coop receives fruit and vegetables from elsewhere.

– a very bad idea

The change does not sit well with the Geir Pollestad of the Center Party. He chairs the business committee of the Storting.

– From how this looks, it is the example of the crown of something we do not want, says Pollestad.

It’s critical that big players like Norgesgruppen gain even more power in the grocery market.

– I think it seems like a very bad idea. The biggest player is further consuming the value chain, says Pollestad.

Pollestad is concerned that all players who want to deliver products to Norwegian consumers will receive a fair distribution.

He recently told the Nationen newspaper that he does not rule out breaking one of the chains to prevent the imbalance from widening.

– In the extreme, you may have to split companies. But we also need to take a closer look at who controls the distribution of goods, he says.

And add:

– That change goes straight to the heart of the problem, says Pollestad.

Asko: – Disagree

– We do this to be more efficient and competitive, says Tore Bekken, CEO of Asko.

He disagrees with the Pollestad criticism. Bekken does not believe that the change will give Norgesgruppen more power over the value chain.

– In practice, this is a flow of goods that is already integrated into our value chain today, says Bekken.

Explain that Bama currently rents space in the Asko warehouses and has people working there.

– This change means that we take over the job. This is how we will have a system to deal with. It will provide smoother handling of goods, says Bekken.

The audit is informed

The change is scheduled to be implemented in the fall of 2021.

But before it can be implemented, the collaboration must be approved by the Norwegian Competition Authority.

– We have been informed about the case, but we have not received any formal notification yet, says Beate Berrefjord from the Norwegian Competition Authority.

Therefore, the Authority has not yet decided whether to intervene in the case.

Strong focus on the grocery industry

There is currently a strong will to do something with the competition in the grocery market.

In a recent report, the Norwegian Competition Authority concludes that Norgesgruppen has had much better purchasing conditions than competitors Rema and Coop for several years.

At the same time, the audit investigates Norgesgruppen, Lilleborg and Mondelez. The background is the suspicion of a violation of competition law.

A report was also recently submitted to the Storting on competition in the grocery market. It proposes several intervention measures. The report will be considered by the Storting business committee this fall.