The government will give small grocery players greater bargaining power. A good start, according to Oda. Coop believes the Minister of Industry does not go far enough.
WANTED MORE: Ingvill Størksen in Coop wants a ban on differences in purchase prices that cannot be factually justified. Photo: Espen Solli / CoopPublished: Published:
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The short version
- Industry Minister Jan Christian Vestre (Ap) proposes a ban on differences in purchase prices in the grocery industry to give smaller players greater bargaining power.
- According to the proposal, the new rules will rarely affect the three largest grocery chains Norgesgruppen, Rema 1000 and Coop.
- The online food company Oda expresses support for the proposal, while the Norgesgruppen is critical for fear of political interference in free commercial negotiations.
- Ingvill Størksen, director of policy and government relations at Coop, expresses concern that the regulation is too weak to prevent the largest players from becoming even bigger.
- Oda CEO Karl Munthe-Kaas believes the proposal is a good start, but not perfect, and calls for the closing of holes in the regulations.
The summary is made by the AI tool ChatGPT and quality assured by E24’s journalists
Sea view
– I like what the minister of business is trying, says Karl Munthe-Kaas, CEO of the online food company Oda.
Last Friday, Jan Christian Vestre (Ap) put forward a new proposal on a ban on differences in purchase prices in the grocery industry.
- It aims to make it easier for small and new grocery stores to challenge the big ones.
- A large food supplier should not be allowed to exploit its own bargaining power so that the small one has to pay such a high price that it is unable to be competitive.
- If both parties are big and strong, there will be no change.
Oda understands this to mean that the regulation will apply when food giants such as Orkla negotiate with them, but not with Norgesgruppen, Rema 1000 and Coop.
– Here there is a lot of political will and a desire to put an end to illegal price discrimination that affects small players, such as Oda. By purposefully protecting those who are at risk of being exposed to price discrimination, we are one step closer to a well-functioning Norwegian grocery sector, says Munthe-Kaas.
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PARTIALLY SATISFIED: Oda CEO Karl Munthe-Kaas is satisfied with a grocery proposal that will help the challengers. But two changes are needed, he believes. Photo: Javad Parsa
– Means nothing to us
Banning price discrimination has been a battleground for Oda and the rest of the Norgesgruppen’s challengers for a long time.
Norgesgruppen – with chains such as Kiwi, Meny, Spar and Joker – is clearly the largest and also has the best purchasing conditions, according to the Norwegian Competition Authority.
The competitors have wanted rules that even out the differences. This proposal does not seem to be able to do that, according to Kårstein Løvaas. He is head of business policy at Rema 1000 owner Reitan Retail.
– The proposal seems exciting in terms of making it easier for small players. But as far as I understand it means nothing to us.
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Haven’t given up
In contrast to what was scrapped this summer, Vestre does not now aim to regulate negotiations between equal parties.
Only when the store’s market power is significantly weaker than the counterparty will it be prohibited to charge a different price, if the differences can restrict competition.
This means that the new rules will rarely have anything to say for the three large grocery chains (Norgesgruppen, Rema 1000 and Coop), the consultation note states. Ideally, Reitan Retail would have wanted more.
NOT INCLUDED: Kårstein Løvaas and Reitan Retail do not seem to get help from Vestre to catch up to Norgesgruppen’s lead. Photo: Ole Berg-Rusten / NTB
– If I add goodwill, I think this can have a positive effect for consumers over time. But if they had done as we have been asking for a long time, to ban unreasonable differences in purchase prices, then prices would have been lower at Rema 1000 from day one, says Løvaas.
– Have you given up on getting rules that even out the differences with the Norgesgruppen?
– We will never give up on it, but there are things that indicate that there is a bit of a headwind there in the near future.
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The Norwegian group is critical
Immediately after the news broke last Friday, and long before anyone had had a chance to read what the proposal was about, the Norgesgruppen’s critical comments came.
The skepticism has not changed after the first reading, confirms communications director Stein Rømmerud.
– What makes us negative is that people talk about interference in free commercial negotiations. It will create uncertainty about what you are allowed to do, weaken our negotiation results and lead to higher food prices.
DOES NOT WANT INTERFERENCE: Rømmerud in the Norgesgruppen asks Vestre to keep their fingers out of the negotiation room. Photo: Hanna Kristin Hjardar / E24
– But the proposal doesn’t seem to hit you?
– We are in favor of removing or reducing barriers to establishment. We are already contributing there by giving smaller players, such as Bunnpris, the same wholesale conditions at Asko that our profile houses get. But we are still negative about political interference. And it is not that it is impossible to establish yourself in Norway. Just look at Normal, they have managed to move significant turnover out of the traditional grocery stores.
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Fear of weak regulations
At the opposite end you will find Coop.
– We will now go through the new proposal for regulations against price discrimination carefully, but fear that it is too weak, says director, policy and government contact Ingvill Størksen.
Coop wants differences in purchase prices to be factual, and to be able to be justified, she says.
– We cannot see that this has been taken care of in the new proposal. A weak regulation will not sufficiently prevent the largest, both on the retailer and supplier side, from growing even larger.
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Oda asks for the sealing of holes
Although Oda believes the proposal is a good start, it is far from perfect, according to Munthe-Kaas.
– The question is whether the regulation will work as intended as long as it is possible to give different prices on the basis of volume, he says.
CHALLENGER: The Oda boss wants a requirement that will ensure that Oda gets the same discounts as the biggest ones. Photo: Fredrik Solstad / E24
The fact that Norgesgruppen buys more bottles of Zalo than Oda does is not a valid reason why Oda has to pay more per bottle, Munthe-Kaas believes.
– At least not as long as we bear all the costs for the logistics ourselves. In that case, large players will always have an unfair advantage that makes it impossible for us small players to take up the competition. If this gap is not closed in the regulations, the big ones will only get bigger and the small ones will disappear.
The Oda boss is also calling for a requirement that everyone should be given the opportunity to give the same benefits in return. A counter-performance is, for example, good shelf placement or good online exposure.
– Only then do we have the same rules of the game, and can compete in the best interest of consumers.
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