The debate is raging about Norwegian food prices, and both politicians and consumers want answers as to who is to blame.
Norwegian food prices and the price of non-alcoholic beverages are 50 per cent above the EU average. Only Switzerland had a more expensive price level, and was 66 per cent above the EU average, according to 2021 figures Statistics Norway has received from Eurostat.
The Norwegian import protection for agricultural products is – according to Nettavisen – highlighted as one of the reasons why the price level is higher than in the EU.
Enormous price differences: – Only way for Coop to survive
70 percent more expensive in Norway
Norske Rema 1000 is Denmark’s largest grocery chain. A price comparison of the same food products at Rema 1000 in Norway and Denmark shows that the price level in Norway is extremely much higher. In several of the cases, there is some change in pack sizes, but even after conversion to Norwegian pack sizes for the same product, Norwegian consumers come off badly.
- Spanish salami and chorizo are 74 percent more expensive.
- Serrano ham is 61 percent more expensive.
- Parmigiano Reggiano receives a price mark-up of 24 percent.
The same serrano ham is almost NOK 180 more expensive in Norway than in Denmark. Similar salami and chorizo products receive a price mark-up of NOK 160 per kilo.
Ivar Gaasland, social economist and associate professor at BI, has no doubt that import protection makes hams and cheeses more expensive in Norway than in Denmark.
– Prepared pork ham has a duty rate of NOK 120.83 per kilo into Norway. It makes a big difference. The customs duty on cheese from the EU into Norway is NOK 27.15, says Gaasland.
Big price differences
The highest markup in the shopping basket is found on cleaning sprays. The spray is the store’s own brand, corresponding to Orkla’s Jif Bathroom and Jif Kitchen.
500 milliliters of the cleaning agent is 80 per cent more expensive in Norway. Danes pay NOK 12 for the bottle, while Norwegians pay NOK 22 for a spray.
Social economist Ivar Gaasland believes that the large price difference for the cleaning spray shows how great the concentration of power is also among suppliers such as Orkla.
– Here, in light of import protection, Orkla has an all too dominant position in the market. It affects pricing, he says.
Håkon Mageli, executive director of Orkla, is completely stunned when he hears Gaasland’s statement.
– No, no, that’s not possible. I can hardly breathe. It is almost unbelievable that you can make such a statement, he says.
He rejects that Orkla is too dominant in the product category, and points out that cleaning agents are not affected by customs duties.
– There are no restrictions for grocery chains to find alternatives to Orkla’s products. It is the grocery chains that set the prices for both our products and own brands (EMV), he says, and emphasizes:
– Ivar Gaasland’s comment falls on its own unreasonableness.
High tariffs
The price survey shows that blue mold and chilli cheese from Castello are cheaper in Norway.
Bunnpris owner Christian Lykke is not too surprised. He believes the price differences cannot be solely explained by import protection. The Castello cheeses are priced artificially low because there is a lot of competition for the product, says Lykke.
– If these products are only available at Rema 1000, they may charge a little extra. It happens all the time, he says, but adds that the markets in Norway and Denmark are very different.
– All agricultural goods in Norway are more expensive to buy in Norway due to import protection. There is stiff competition for individual products, for example Philadelphia cheese.
The Bunnpris owner believes that looking at individual products can give a distorted picture. He says you have to look at the product group as a whole.
– The agricultural policy in Norway with import protection means that you have to raise the prices of everything in the whole store. Dopapir in Norway can be expensive because the shop finances the customs duties on the agricultural goods. We who run a shop have to make money, he says.
Import protection does not exclusively affect the price of agricultural products.
– The extra cost is spread over all the goods in the store. This is, for example, the reason why shampoo and drain openers can be more expensive in Norway than abroad. We take it back to shampoo to sell the patty dough cheaper, he says, and emphasizes:
– The sum of what we sell makes us earn money. Will will not have trade leakage to Sweden. Therefore, minced meat is sold at a low profit, but is financed with money from other individual products, he says.
– Would the food be cheaper if import protection was eased?
– Yes, it is easy to believe. We all try to make money, and juggle prices – there is no one-to-one relationship between what the store buys the item for and what the consumer pays. It has to do with the competition, which means that we also sell some at a loss, and other goods with a very good profit, he says.
– None of us have any honorable intentions other than trying to make money. We must make money from the goods we buy in. All traders do it. The sum of what we sell makes us earn money.
Rema 1000: – We pay more for the goods in Norway
Line Aarnes, Category and Purchasing Director at Rema 1000 believes that it is generally very difficult to compare products from two different countries. Both shipping, quotas, customs, packaging, content and labeling schemes come into play.
– Several of the items in the overview are manufactured in Denmark. Shipping costs and customs duties mean that Rema 1000 Norway pays more than Rema 1000 Denmark for the same goods, she says.
Aarnes points out that there are differences in content, size and packaging of the spray bottles.
– The shipping costs for the Danish bottles are lower, as the production site is located in Denmark, she says.
– Both bottles are made from recycled plastic, but in Denmark the bottles are cheaper as they have white plastic. Both bottles have the Swan label, but we in Norway also have another labeling device which is “VEGAN”, which costs extra to have on the bottles, concludes Aaarnes.
