The government wants to see the food giants in the cards

On Thursday morning, the government held a crisis meeting with the biggest players in the grocery industry. The topic was the large increase in food prices. In 2022, the price of foodstuffs increased by 11.5 per cent.

Now the government is warning that they will increase unexplained prices and cash flows in the industry.

Industry Minister Jan Christian Vestre (Ap) and Agriculture and Food Minister Sandra Borch (Sp) presented the following three measures after the meeting:

• Carry out a margin study to see where the margins – i.e. the money – in the value chain ends up.
• Ask the Norwegian Competition Authority to take a closer look at so-called price signaling. The government believes that actors warn each other about future prices through the media.
• Investigate how price formation in the grocery industry takes place. Prices are negotiated twice a year (1 January and 1 June). The government will have increased knowledge of what is happening here.

– Borders on illegal

– This is a value chain that we know is characterized by too little competition. The fact that the players almost warn each other about what the prices will be can be very harmful to competition and even borders on illegal price collusion, says Vestre.

The Minister of Trade and Industry has several times expressed concern about the lack of competition in the grocery market. He further says that he hears different stories from different actors.

Borch points out that they have examples of food products where it is difficult to explain the price increase.

– For example, with butter, the wholesaler has increased the price by 9.3 per cent, while the grocery chains have increased the price by 21.3 per cent, says Borch.

– Do the grocery chains take advantage of the situation we are in, do you think?

– We have the impression that the prices of certain goods are increased more than can be explained, and for which we have not received a good explanation today either, says Borch to TV 2.

Don’t take the blame

The Norgesgruppen sent out a press release shortly after the meeting was over. They owe the increased food price to high electricity prices and increased prices from suppliers.

They indicate that prices are increasing throughout Europe, and that price growth has been higher in Denmark and Sweden than in Norway.

– Both the suppliers and the shops feel that the costs are going through the roof. This leads to food prices increasing, but we still profit less from this situation, says CEO Runar Hollevik in the message.

Vestre was asked about this by TV 2 after the meeting.

– The reason why one of the measures we are putting forward today is a margin study, is that we want more insight into how these prices are actually set, who benefits from it, who loses from it, where does the money go. We know that Norwegian consumers probably pay more for their food than necessary, compared to a situation where we had better competition, he replies.

Collection of the largest

It was not lightweights who trooped up to the premises of the Ministry of Trade and Fisheries on Thursday:

Coop, NorgesGruppen, Reitangruppen, Orkla, Nortura, NHO Mat og drikke and the Danish Food Suppliers’ Association (DLF) were all present.

Vestre believes there are more positive prospects going forward. A fall in energy, transport and commodity prices is expected. He hopes the industry will take this into account when prices are adjusted.

– Now we have to show social responsibility and a spirit of service. We must bring down inflation. The government has taken a number of measures, and now we hope that the players in the entire food industry contribute, and that food prices do not increase by a krone more than is necessary.