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A pack of patty dough for NOK 80-90 is no longer unheard of. Now it can be a little cheaper. Photo: Aurora Ytreberg Meløe / VG Photo: Aurora Ytreberg Meløe / VG
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A pack of patty dough for NOK 80-90 is no longer unheard of. Now it can be a little cheaper. Photo: Aurora Ytreberg Meløe / VG
The side fillet oozes out of the meat layers. Now the farmers are cutting the price – and the shops say they are following suit.
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In order to increase sales, Nortura is cutting the prices of pigs by 80 øre per kilo and 4 kroner for cattle, until the end of the year. The farmers have expressed dissatisfaction with the price reduction, as it creates financial problems for them. Discount stores Kiwi, Rema and Extra are following suit and cutting prices. Economics professor Øystein Foros comments that it is unusual for Nortura to go public with price reductions, and suggests that this could be an attempt to put pressure on the grocery chains to pass on the price reduction to customers. Show more
At the same time as meat prices have risen, sales have fallen since the summer.
Before Christmas, there will be 7,000 tonnes of cattle and 4,000 tonnes of pigs in stock. There is a particular surplus of side meat and mincemeat raw material.
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– It is rare that we see such large volumes, says director Ole Nikolai Skulberg i Nortura total market for VG.
Now Nortura – the farmers’ cooperative/association – is taking action to increase sales, and is cutting the price of pigs and cattle. Specifically, the farmers are cutting the price they charge for pigs by 80 øre per kilo and NOK 4 for cattle – for the rest of the year.
– We hope that this will be able to help increase sales.
nations first wrote about the cut.
DIRECTOR: Ole Nikolai Skulberg in Nortura total market. Photo: Nortura
The farmers themselves are not happy with the price cut – and have a clear expectation:
– It creates a bad economy for the farmers. Cattle and pigs are large and important productions in Norwegian agriculture. But when Nortura first lowers the price to increase sales, it is clear that we have a clear expectation that the rest of the value chain (daily goods) will also lower the price so that sales increase and the meat can be used, says leader Bjørn Gimming of the Farmers’ Association to VG.
– Bacon and minced meat should certainly become cheaper, which is the most of it now. And other minced meat products, such as patties and meatballs.
NOT SATISFIED: The farmers – represented by the Farmers’ Association’s Bjørn Gimming, are dismayed that the price of the goods they sell is falling. Now they expect the shops to follow suit. Photo: Farmers’ Association
The shops respond to this
The increase in the price of food has been record high in the past year. Bacon and cold cuts have increased by 7.4 per cent in a year, beef by 9.9 per cent and pork by 1.9 per cent.
VG’s food exchange showed that the price of meatballs has increased significantly since last year – but the check was made the day before they are supposed to have lowered the price.
The discount stores all tell VG that from 1 September they have reduced the price of meat products.
Kiwi: – We received new entry prices for several meat products on 1 September. Then we lower the price to the customer. Around 50 meat products got a new price starting at 07:00 on Friday, says communications director Kristine Arvin. This applies, among other things, to mincemeat/carb dough and bacon. Rema: – Now we have cut the price of above 40 meat and cold cuts because we have received lower prices. The size of the cuts will vary from 0.6 to 8.6 per cent. Extra: – We want to consolidate our strong position as a low-price chain and have immediately followed up on all price cuts.
VG asked all the chains if the stores cut at least as much as the refusal they get from the farmers. Only Kiwi replied:
– Yes, we have cut the equivalent or more from the same day we received the reductions.
– Very unusual
Economics professor Øystein Foros has followed the food industry for many years, and finds one thing about this surprising:
– It is interesting in itself that Nortura comes out with the price rejection, because usually nothing is said publicly about the level of the purchase prices.
– What does it mean that they are so ready for it?
– It is very unusual to say that such a reduction applies to all grocery chains. When they go public with this, I assume that the purpose is to put pressure on the grocery chains to pass this price reduction on to the customer.
NHH: Professor Øystein Foros. Photo: Helge Skodvin / Helge Skodvin
Lower purchase prices result in lower prices, but exactly how this plays out can vary, he explains. In other words, it is not a given that all products within flank meat and minced meat will fall in price.
– The stores have 6,000 different items. This does not mean that all meat has become cheaper. The customer must be aware, this applies to all promotions, such as price locks etc.
Harry trade and expensive time
Nortura CEO Skulberg believes that the sales decline is about people having less to worry about.
– It is especially now after the summer that we have seen a greater reduction. Our market assessments have a clear connection with reduced purchasing power. And cross-border trade is of course an important factor.
– Should you have bred more/slaughtered less?
– The animals that the farmer has in stalls are not always easy to adjust. From calf to production, it takes between 2 and 4 years, replies the Nortura manager.
FYI: Foros has carried out consultancy assignments for Oda and Rema 1000.
Published:
Published: 03.09.23 at 22:08
Updated: 04.09.23 at 00:07
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2023-09-03 20:08:45
#Sales #plummet #cuts #price #minced #meat #bacon
