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Low price chains promise that consumers will get all the tax cuts.
ENSJØ (Nettavisen Økonomi): The government parties and Frp reached an agreement on the state budget on Tuesday. As part of the budget agreement, there will be solid tax cuts for both chocolate, mineral water, beer, and not least snus.
So it is a satisfied CEO Trond Bentestuen at Rema Norway Nettavisen Økonomi meets FRP leader Siv Jensen at Rema store in Ensjø in Oslo.
See Rema and Siv Jensen’s boss interview at the top of the case!
– It is a powerful and important package, both in terms of employment in Norway and reduced cross-border trade. And then it is very good that it will lead directly to lower prices among consumers, says Bentestuen satisfied.
He came out early by pointing out on Twitter that these cuts will be noticed by consumers.
Direct output
– I’d say it’s stronger than signage. We will take these tax cuts directly on the price, and we are in full swing to calculate the effect on the individual product.
– We have some preliminary calculations, but it will have a big impact on snus prices. It will also affect the prices of beer and sugary products. promises the director of Rema.
Bentestuen says it depends a bit on the taxes applied to different product lines, but it will be a “massive tax cut.”
– When can we expect these cuts to be implemented?
– In my view, they will now come into effect on January 1. We have been reducing the prices of Rema 1000 for 40 years. It is our responsibility to ensure that these tax reductions reach consumers.
Read also: Radbrekker tax cuts: – We sacrifice the future health of children and young people
It’s much cheaper
Following budget negotiations on Tuesday, the four bourgeois parties agreed on the following tax cuts:
* Tax on beer and wine is reduced by 10 percent.
* Tax on snus is reduced by 25 percent
* Tax on sugar and chocolate is eliminated.
* The tax on non-alcoholic beverages will be reduced by half.
The total reduction of taxes on cross-border goods will be almost 3.7 billion.
Also read: Price drop on candy for the first time in three years – Now Extra comes with a price promise
Fall hunt
The director of Rema says that now the players are in the middle of the so-called autumn search in the Norwegian grocery industry. Here they negotiate the terms with the providers.
– We must ensure that these tax cuts enter the outcome of our negotiation, because we will make it reach the consumer, promises Bentestuen.
But Rema is also concerned about the effect on employment, which they believe is significant in the crown year 2020. Now Rema sees the real effects of the reduction in cross-border trade.
– For example, we have 7 percent more employees in our stores this year compared to last year, and we also have an increase in employees on the distribution side. So I know that there is also an increase in employment on the production side of our suppliers, so this has a significant effect on employment and value creation in Norway, says Bentestuen.
Harselerer
– What really matters to me is that this is a good thing. I see that there is a part of social networks that is harassing that snus is the most important thing now. But they lose the value creation perspective and the employment perspective and come down to poke fun at individual products.
Bentestuen thinks it is silly and says with the role that it has that this is of great importance.
– These are their jobs, adds Siv Jensen.
– I am very happy that we have forced the other parties to get on their knees to implement the ever-increasing reduction of taxes on products normally exposed to the borders. This means that when property taxes are completely gone, Norwegian consumers will notice, Jensen says.
Also read: Total price war on snus: – We guarantee price cuts
Patchwork
The FRP leader believes that the current tax system is a “patchwork quilt of a makkverk.”
– I think my former position in the Ministry of Finance is delighted with what is happening now.
She says that when taxes on non-alcoholic beverages are cut in half, it is clear that you notice that soft drinks and mineral water become cheaper in Norwegian stores. Snus is 25 percent cheaper.
Yes, how sure are you as a former finance minister that tax cuts will benefit consumers?
– What was clear to me yesterday, and what I want to repeat now, is that Bentestuen and all those who operate in Norwegian retail must ensure that this directly benefits consumers.
The effect disappeared
– We have seen before, when we reduced the VAT on food a few years ago, that the effect disappeared shortly after. We will follow this closely. I also believe that the consumer authorities will follow this and the consumers themselves.
Jensen says that when they first spend $ 3.7 billion to cut taxes, they do so for the good of consumers. Ordinary people should mark it on the checkout tag when they go to the store.
– We do not do it to enrich these kings of the stores, Jensen emphasizes.
– What are the best hopes you have for these cuts?
– The first is, of course, that consumers will notice this when shopping throughout Norway. The second is that we will see more employees in the Norwegian supermarket, which is very important.
Not trained
Jensen says that the grocery industry is an industry that employs a lot of people. There are many who are not trained and who may have been unemployed until now.
– The third factor is the effect on cross-border trade. We hope that instead of sponsoring Swedish traders, we can leave the money in the form of increased employment and in the Norwegian treasury, which we can use again for welfare measures in Norway.
The FRP leader is very satisfied with what the Progress Party achieved in the fiscal area in the negotiations with the government parties. He doesn’t want to say anything about where the toughest hits went, but he admits that not only was KrF the toughest opponent during the negotiations.
– I have negotiated before, but I will not say anything about the negotiation strategy, says Jensen.
In its whole
The other big chains also promise that it will be consumers who will benefit from the further cuts.
– We promise that the tax cuts will be passed on in full to our clients. Tax cuts in the state budget will come crown for crown at lower prices, says Kristine Aakvaag Arvin, Kiwi communications manager.
Discount chain Extra may also offer lower prices next year.
– Coop is owned by our clients and of course they will get a price cut corresponding to the tax cuts. We’ve done this before and it should just be missing, says Harald Kristiansen, communications manager at Coop Norway.
Also read: Ripped off the shelves after the extreme price war: now kiwi traders are taking action
See Siv Jensen on FRP’s wins and losses on the state budget in the video below:
“The 50 percent reduction in the tax on non-alcoholic beverages, such as juices and soft drinks, equates to NOK 925 million in saved expenses for businesses and consumers,” the Conservatives write on their website.
When the tax on chocolate and confectionery is also completely removed, it means that the state will collect NOK 1.425 million less from producers, stores and consumers next year, according to conservatives.
Also read: The teacher dispels myths about soft drinks: – I’m not ashamed (+)
Tuesday’s budget agreement was also well received, among others, by NHO:
– We are pleased that the government and the FRP have gotten to know us and our companies in trade by significantly reducing taxes on typical cross-border commercial products. This will change shopping habits and create new jobs in Norway, said Anne-Cecilie Kaltenborn, CEO. in Service and Commerce of NHO.
However, not everyone was equally happy. Eigil Knutsen is on the Storting finance committee for the Labor Party and he is not that enthusiastic about the budget.
– After weeks of bickering, this divorce settlement ends with the government and FRP agreeing to cheaper alcohol and tobacco against not cutting the refugee and aid quota, he said Tuesday.
Also read: Tax reduction for snus, sugar, beer and wine
He believes that negotiations should rather focus on what we can do for those who have lost their jobs and are laid off, and companies that are struggling and on the brink of bankruptcy.
– This is a strange and expensive deal that does not respond to the biggest challenges Norway has. If it had been up to us, we would have preferred to choose jobs, give the laid-off paid vacations and strengthen the health service, Knutsen said after the deal was known.
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