Supermercados, Wholesale | Warns against banning First Price and Eldorado:

– It should not be prohibited. It will be quite unheard of in a modern market economy. It is also common in most other European countries, Ivar Gaasland, associate professor in the BI Department of Economics in Bergen, tells Nettavisen.

Last week, Nettavisen wrote that several Storting politicians are open to banning private label from food chains (EMV). They all have them, both Coop, Rema 100, Kiwi, Meny, and Joker, to name a few.

Brands such as “Coop” and “Xtra” (Coop), “Nordfjord”, “Kjeldsberg” and “Solvinge” (Rema 1000) or “Folkets”, “Eldorado” and “First Price” (Norgesgruppen) are owned by the chains and falls under the designation. EMV is usually cheaper than the products of well-known brands such as Gilde, Prior, Maarud, Coca-Cola, Tine and Mills, which are owned by so-called grocery suppliers.

In the video at the top of the box, you can see examples of different items that Kiwi has from Eldorado and First Price.

Believe that competition will increase

Dag Fossen, a veteran of Småbrukarlag and an active debater, proposes to ban large food chains from selling their own brands.

– Supermarket chains should be prohibited from having direct and indirect ownership of the brands, he tells Nettavisen.

He believes grocery chains will prioritize their own brands in store, and this could lead them to squeeze out more suppliers for major brands when prices drop so low.

Therefore, the waterfall wants a change. He also believes that we will have increased, and fairer, competition if the chains’ own brands are acquired by someone else.

– If consumers want Eldorado spaghetti, someone else will produce it. But the chains shouldn’t own the brands they sell, he says.

The waterfall is a bit sharper now than it was last week. He recently told Bondebladet (for subscribers) that he thought it should be forbidden to have their own brands when the chains have reached a certain size.

– What Fossen proposes is something that we have evaluated and are considering, said Geir Pollestad in the Center Party after the statement.

Pollestad is one of three politicians, from three different parties, who have been critical of the EMV.

Also read: Have you noticed this on the store shelves? Now the general farmer is settling for Kiwi

– Completely blind

However, grocery experts leave little to proposition.

– Representatives in the Storting may be completely blind and not understand how the market economy should work. Imposing a ban on the grocery trade that has its own brands is completely unthinkable in my eyes, says retail expert Odd Gisholt to Nettavisen.

Gisholt points to comparable examples, to show that it is not only in the grocery industry that this is common practice.

– At Hennes & Mauritz, they sell their own brands. At the same time, they also sell cosmetics from both their own brands and well-known brands like Loreal, he says.

Grocery expert Erik Fagerlid also can’t see how it will be possible to ban EMV.

– I have no faith in banning it. One possibility could be to regulate the EMV, setting a limit to the number of products that can be in each category, so that they do not receive as much power, says Fagerlid.

It also points out that the proportion of EMV in Norway remains low compared to other countries.

Also read: Extra is the fastest growing supermarket chain in Norway: – I am proud

– Good for consumers

But EMV can be positive, because it supposedly provides cheaper products to consumers, in addition to separating the chains from each other.

– Today, EMV is an important factor that separates the chains from each other, because they all sell products from, for example, Coca Cola and Colgate, says Fagerlid.

For example, Norgesgruppen has Jacobs Utvalgte, which is a series of products that you will not find among the competitors.

It is supported by Gisholt, who also believes it is a competitive advantage, in addition to offering better prices to customers.

– It’s good for consumers, because they generally get cheaper products, says Gisholt, continuing:

– Today, Tine and Nortura have enormous power in the market. Therefore, the chains have started with their own egg production and their own meat production. On the other hand, they cannot start their own milk production.

Gaasland also believes EMV is important to prevent major brand suppliers from gaining too much power. He points out that the big providers are already very powerful. These include Tine, Nortura (Gilde and Prior), Coca-Cola, Pepsi and, not least, Orkla, which has the brands Nidar, Kims, Jordan, Stabburet, Fun, Grandiosa, Nora and many more.

– Grocery chains need alternatives to dominant national suppliers such as Orkla, Tine, Nortura and Mills. EMV is helping lower prices for suppliers, he says.

However, it is important that the lower prices that chains receive benefit customers. It says that both chains and major brand suppliers are protected by import protection.

– I think import protection should be lowered, so that Norwegian suppliers receive real competitive pressure from foreign suppliers in all product segments, says Gaasland.

Also read: Mills brought Coop to the competition committee: – Illegal imitation

Believe it affects innovation

However, Fagerlid sees some challenges with EMV.

– It is not positive for innovation and product development. When, for example, Orkla’s biggest customers become its biggest competitor, it’s problematic, he says.

Fagerlid shows with an example: if, for example, Orkla launches a new pizza, they risk a similar pizza marked with the first price the following week.

– Scary for suppliers and strategically wise for supermarket chains, he says.

Fagerlid points out that there are often very similar ingredients in EMV and in the brands. For example, soft drinks, jams, pasta, sausage, French fries, etc.

Grocery chains also avoid expenses with development costs.

Ivar Gaasland, on the other hand, does not think EMV is a danger to innovation. On the contrary.

– Everyone is sharpening and that increases the competition. If there’s a pizza that looks a bit like a new one from Orkla, Orkla just has to make an even better pizza. This is how innovation happens, he says.

Gaasland also points out that there is also legislation at the bottom, which means you can be sued if you sell a product that is too similar to another.

Consumers decide

Another challenge that Fagerlid points out is that in many cases it is the large manufacturers and suppliers that produce EMV for Rema, Norgesgruppen and Coop.

– Thus, well-known suppliers can have better finances, since they benefit from the production of goods for EMV, says Fagerlid.

This is also something that Gisholt points out. He believes that major brand producers, like Aass Brewery, are concerned that they are being pressured by the trade.

– They have their well-known Aass beer, but they collaborate with Norgesgruppen, where they are, please call it pressure, to make their own lager called Seidel, he says, and explains:

– The Norgesgruppen are big, and when they buy a lot of Seidel beer, it goes beyond Aass pilsen, but Aass doesn’t dare to say anything but yes because there is a lot of rotation of this one.

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However, Gisholt does not see this as a major problem.

– It is good for consumers to choose. If they can get a good beer called Seidel cheaper than Aass beer, then they go for Seidel, he says.

There are several similar examples, but Gisholt believes that the most important thing is that consumers are happy with the products they choose, not the brand.

– Nothing is pressed

Christian AK Aass, CEO of Aass Brewery, does not want to comment on direct business connections, but responds to Gisholt’s remarks generally.

– We cooperate with our clients. They play us well and we try to do well. We have a good collaboration with all the chains, and they don’t pressure us at all, he tells Nettavisen.

– It would go beyond our integrity and our brand, and we are proud of what we do. We don’t want to do anything to destroy our brand, he explains.

Aass, on the other hand, believes that EMV in the grocery industry leads to intensified competition, and free competition in Norway is good.

– The own brands of the supermarket chains are our competitors, and we only have to work to make our brand bigger and better. It’s the consumers who decide, and if they choose our products, we must work with that, says Aass.

Read also: Radbrekker tax cuts: – We sacrifice the future health of children and young people

Also read: Rema promises an awards party for snop and snus: – It will have a big impact

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