Kiwi owner Norgesgruppen removed the bounty hunters after they were fined a historic fine of NOK 8.8 billion. Now they have been looking for new ones.
Norgesgruppen recently announced a prize hunter on Finn.no. The tasks of the price hunters are to monitor the competitors’ prices.
The job advertisement comes eight months after the Norwegian Competition Authority notified billions in fines to Norway’s largest grocery players, Norgesgruppen, Rema 1000 and Coop, for, among other things, illegal price cooperation through the price hunting business.
Illegal price collusion
The Norwegian Competition Authority believes that the grocery players have engaged in illegal price cooperation through the industry norm. The agreement has provided a regulated practice of price hunters in competing grocery stores.
The discount chains, Kiwi, Rema 1000 and Extra are constantly fighting a price war to win customers, and it is in these stores that the price hunters must have regularly monitored each other’s prices.
The Authority believes that the price hunting business may have contributed to a breach of the Competition Act, and driven up prices in Norwegian grocery stores.
The case has still not been completed by the audit, and it remains to be seen whether the grocery players will have to pay the fines of billions.
In 2010, the grocery players signed an agreement, the so-called industry norm. The norm entailed an agreed and systematic monitoring of competitors’ prices through the price hunting scheme.
In December last year, in almost panic, Norgesgruppen was able to say that they have now got rid of the industry scheme, and the way it regulated the monitoring of competitors, which meant that they also shut out competitors’ bounty hunters. The competitors quickly followed.
The head of department at the Norwegian Competition Authority, Magnus Gabrielsen, states that the case of illegal price cooperation is still being processed. Among other things, the audit is awaiting a response from the grocery chains.
When asked what the Norwegian Competition Authority thinks about the reintroduction of bounty hunters, he answers:
– Norgesgruppen is well acquainted with the content of the notification of violation of the ban on anti-competitive cooperation related to the price hunting business, and our assessment of the case. The Norwegian group must itself assess whether the use of bounty hunters again will be in breach of the Competition Act.
He emphasizes that the Norwegian Competition Authority in its notification to the grocery chains has described in detail the problematic aspects of the price hunting scheme.
– Does Norgesgruppen now break the law?
– They know our assessments related to the ongoing case, where we have, among other things, pointed out agreement between the chains on access to the stores, and how the information has been used. Price hunters in themselves are not banned, he says and emphasizes:
– Everything we said in December is on track.
He says that they either make a decision in line with the warning or that the assessments will be changed after the chains have submitted their responses. The Norwegian Competition Authority states that they have not set a final deadline for the chains’ response.
– Has Norgesgruppen had a dialogue with you before they announced the position?
– We will not comment on what kind of dialogue we have had with them until the case is completed. The Norwegian Competition Authority will also not prioritize following up the vacancy announcement.
The find advertisement states that the tasks include obtaining prices in the competitors’ stores and ongoing reporting to NorgesGruppen’s head office in Oslo via text message or telephone.
In addition, technical equipment is handed out for reporting. A car is required, as the employee must expect to be able to move quickly between different areas, it is stated.
Sources Nettavisen has spoken to believe that the dispute between the Norwegian Competition Authority and the industry will be long-lasting. They envisage many rounds in the legal system where the industry will claim its innocence.
According to several sources Nettavisen has spoken to, it is worrying that Norgesgruppen controls 44 percent of the total grocery market.
Among other things, extra grants have been given by the Ministry of Trade and Industry to the Norwegian Competition Authority to monitor the competitive situation.
The Competition Authority’s blessing
Stein Rømmerud, Executive Vice President of Norgesgruppen, emphasizes that the notification from the Norwegian Competition Authority is about the industry norm
The Executive Vice President points out that the agreement came as a result of a dialogue between many players in the industry.
– The Norwegian Competition Authority was one of those who was kept closely informed about this agreement. But this is something other than that they have concluded that bounty hunters are in themselves illegal, he says.
Stands on its own
As previously mentioned, panic arose in the grocery industry when the Norwegian Competition Authority announced billions in fines for what they believed was illegal price collusion
– Why did you throw out the bounty hunters in December when the billion fines were announced?
– We terminated the part of the agreement that regulated this, the so-called industry norm for comparative advertising, says Rømmerud, and emphasizes:
– We have said several times, even when this case arose, that the industry norm is not in violation of competition law, he says.
Norgesgruppen believes that price hunters ensure low prices in the market, and that it is not possible to compete on price if you do not monitor competitors’ prices, he says.
– The Norwegian Competition Authority states to Nettavisen that everything they said in December is up to date, what do you think about it in the wake of the job advertisement?
– We feel very confident that we do not break the competition law. We have visits from bounty hunters from our competitors, and we also follow others. The job advertisement where we are looking for a prize hunter is part of it, says the executive vice president.
Rømmerud will not agree that there is a basis for claiming that the price hunting scheme is an illegal price collaboration.
– We do not understand the Norwegian Competition Authority’s notification of billion fines, and we will not accept a decision where we are said to have violated the Competition Act.
– How far are you willing to take this in the judicial system?
– We will take this as far as needed. Nothing illegal has happened here.
Norgesgruppen says that it is reasonable to assume that all players have continued to monitor competitors’ prices, even after they said that the price hunters were thrown out in December last year.
Rømmerud will not answer how many bounty hunters currently work for Norgesgruppen.