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In the Consumer Council, we are pleased that Lars Sørgard and the Norwegian Competition Authority share our concern that large differences in purchase prices in the grocery market may harm competition and consumers (post in DN 18 September), but we believe that there is neither a comprehensive assessment nor a clear conclusion that a ban on price discrimination leads to higher consumer prices.
Our impression is that the Norwegian Competition Authority has stuck itself in a position where it is assumed that almost any interference with the free right to bargain will lead to higher shelf prices. This despite that a report commissioned by them (Straume & Johansen 2019) stated that the economic literature is not unambiguous and that «the few empirical studies that exist all have clear weaknesses».
Even the “clear conclusion” against regulation from the government-appointed expert group that Sørgard refers to was loaded with reservations.
The expert group’s report is more of a discussion of various academic theories than a comprehensive assessment of how stricter regulation of price discrimination will affect Norwegian consumers.
A study that does not consider why Lidl, ICA and marked.no gave up in Norway, or how Bunnpris has increased its operating margin by almost eight percent since the wholesale change to Norgesgruppen in 2017, can hardly be called comprehensive.
Perhaps we can also learn something from Finland, which in 2014 introduced a law regulating the business practices of dominant grocery chains. The Finnish price level for food was unchanged from 2013 to 2020. In the same period, Norwegian food prices rose by almost 23 per cent (Eurostat).
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The Consumer Council believes that the Competition Act’s ban on different prices for equal services should be enough to stagnate ugly differences in purchase prices. But it will require clearer enforcement than we have seen so far.
As it stands now, the incoming government must take up the gauntlet from the outgoing Storting to ensure a more well-functioning market.
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