“The Consequences of Price Discrimination for Agriculture and the Value Chain: AgriAnalyse’s Report Commissioned by NorgesGruppen”

The online newspaper: AgriAnalyse presented a report on the consequences of price discrimination for agriculture and the value chain on Friday. The report was commissioned by NorgesGruppen.

NorgesGruppen is behind, among other things, Kiwi and Meny and has a total market share of 43 per cent. The grocery giant has better purchasing conditions than competitors Coop and Rema 1000. Tin the past the differences have been up to 15 per cent.

According to the Norwegian Competition Authority, the differences are smaller now, but still significant.

NorgesGruppen wants to retain its position with the best conditions with the supplier in the industry. At the same time, Coop, Rema 1000 and Oda have done their bit to overcome what they believe is unfair price discrimination.

Reitan and Oda have, among other things, drawn up reports which emphasize that in the long term prices will be lower. In addition, their reports state that it will be easier for new players to establish themselves in the Norwegian grocery market.

The peasant team: – A dead end

On Friday, the congregation that stands behind NorgesGruppen gathered at Sentralen in Oslo. They believe the grocery giant should be allowed to continue with its special position. The Norwegian Competition Authority also does this.

One of the most important objections to ending discrimination is that prices will increase. Several reports have established that in the short term increased prices in the shops may be the consequence, but in the long term they will most likely decrease.

This also applies to reports ordered by Reitan.

The adjectives were placed loosely on both sides.

«Wrong medicine, dead end, derailment.» stated several of those who held posts.

The farmers’ association expressed great concern if the Minister of Business and Industry introduces the ban.

– This is bad for the value chain and can undermine Norwegian agricultural policy, says Sigrid Hjørnegård, secretary general of Norwegian Farmers’ Association.

She emphasizes in particular that it will hit the meat and fruit and vegetable suppliers. The reason is, among other things, that own brands (EMV) for meat are very large.

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For example, the EMV share on minced meat is almost 80 per cent, and it is also high on other types of meat.

NorgesGruppen and Reitan have the largest holdings in Bama. They are Norway’s largest fruit and vegetable wholesaler.

– It is not possible to start as a fruit and vegetable wholesaler without agreements with Bama, stated Hjørnegård.

She pointed out that they are not against EMV. But that a ban on price discrimination will primarily affect the independent brand suppliers. They will have their room for negotiation reduced in the meeting with the chains.

Takes the place from Tine and Nortura

– We fear that a ban will lead to more EMV, and could take the place of the brands of Tine and Nortura (the company behind Gilde and Prior, editor’s note) on the shop shelves, she says.

The farmers’ association also fears that more EMV will lead to more imports of foreign goods.

– These are predictable statements. Unfortunately, they are used to try to build a narrative about both the great threat EMV supposedly represents, and that this entails a ban on negotiations. Both parts are equally wrong, Knut Lutnæs asserts. He is psenior advisor communications and government contact at Coop.

Coop believes that if the regulation is not introduced, more people than consumers will suffer.

– We think it is regrettable that the Farmers’ Association is running NorgesGruppen’s errands in this matter. If competition-promoting measures are not introduced, it will lead to further market concentration. It is to the detriment of farmers, industry and consumers alike.

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– Rema snorts at the criticism from the Norwegian Farmers’ Association

Authority contact Kårstein Eidem Løvaas in Reitan Retail believes it is a fallacy that there should be no negotiations between the suppliers and the chains.

– It shall continue to be tough negotiations on price and promotions as is negotiated in the industry today, he says, and elaborates:

– The only difference is that, at the request of the Norwegian Competition Authority, you must document why you have given the discount you are giving. You can’t give discounts just because you’ve grown to like each other over time, he says.

If the regulation is introduced, only the dominant suppliers will be affected. An example here is Tine.

– What do you think about the fear that EMV will increase?

– It is not right for Reitan Retail. We can guarantee that a regulation prohibiting unfair price discrimination will not affect our EMV investment.

– We have more EMV than NorgesGruppen because we are forced to. The concentration on the supply chain is so great that we have had to do it, among other things, to increase our competitiveness. It is not a proper concern on their part.

– Every time the politicians want to do something, it is called a dead end. Everyone agrees that the competition is too bad, but no one is willing to do anything, says Løvaas.

Reitan Retail cannot answer directly whether the introduction of unfair price discrimination will lead to less EMV.

The consultation proposal on a ban on unreasonable price discrimination expired before Christmas. Industry Minister Jan Christian Vestre (Ap) has announced that they will conclude in the case shortly.